Axsome Therapeutics Q1 2023 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2023

There are 16 speakers on the call.

Operator

Hello, and welcome to the Axsome Therapeutics First Quarter 2023 Financial Results Conference Call and Webcast. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mark Jacobson. Please go ahead, Mark.

Speaker 1

Thank you, operator. Good morning, and thank you all for joining us on today's conference call. This morning, we issued our earnings press release providing a corporate update and details of the company's financial results for the Q1 of 2023. The release crossed the wire a short time ago and is available on our website at axon.com. During today's call, we will be making certain forward looking statements.

Speaker 1

These statements may include statements regarding, among other things, the efficacy, safety and intended utilization of our investigational agent, Our clinical and non clinical plans, our plans to present or report additional data, the anticipated conduct and the source of future clinical trials, Regulatory plans, future research and development plans, our commercial plans regarding Sunosi, Ovelity and our pipeline products, revenue projections and possible intended use of cash and investments. These forward looking statements are based on current information, These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward looking statements, which are only made as of today's date, and the company disclaims any obligation to update Joining me on the call today are Doctor. Herriot Tabuteau, Chief Executive Officer Mick Peasey, Chief Financial Officer and Lori Engelbert, Executive Vice President of Commercial and Business Development. Ariel will provide an overview of the company and progress made in the Q1 2023 as well as upcoming milestones.

Speaker 1

Following Ariel, Nick will review our financial results and then Laurie will provide a commercial update. We will then open the line for questions. Questions will be taken in the order they are received. And with that, I will turn the call over to Herriot.

Speaker 2

Thank you, Mark. Good morning, everyone, and thank you for joining Axsome Therapeutics' Q1 2023 financial results and business update conference call. We saw strong performance in all areas of our business in the Q1, which included advancing the commercialization of Avelity and Sunosi progressing our late stage product pipeline out licensing ex U. S. Rights for Sunosi and strengthening our financial position.

Speaker 2

Total net product sales in the quarter were $28,800,000 driven by strong performance for Avelity and solid performance for Sunosi. Based on the current prescription trends, we are pleased that our 2 marketed products are now helping a growing number of patients living with depression and with excessive daytime sleepiness. Later in the call, we will provide further details on our commercial performance for velodie and Sunosi. The Q1 was an important milestone for Axsome as it was the 1st full quarter of sales for Avelity. We have also had control of the U.

Speaker 2

S. Rights to Sunosi for about 1 year. Earlier in the quarter, We announced the out licensing of our ex U. S. Marketing rights for Sunosi in Europe, the Middle East and North Africa to PharmaNOVIA.

Speaker 2

PharmaNOVIA shares our excitement and commitment to maximize the potential of Sunosi for patients worldwide. We continue to see significant potential for Sunosi, both in the current indications as well as in potential new indications. With regards to new indications, we remain on track to initiate a Phase III trial of solriamfetol, The active molecule in Sunosi in ADHD in adults in the 2nd quarter. In addition to solriamfetol 4 ADHD, the rest of our leading CNS pipeline includes AXS-seven for migraine, AXS-twelve for narcolepsy, AXS-fourteen for fibromyalgia, and AXS-five for Alzheimer's disease agitation and for smoking cessation. For AXS-seven, our developmental candidate for the acute treatment of migraine, manufacturing activities are moving forward to enable the resubmission of this NDA, which is slated for the second half of this year.

Speaker 2

With AXS-twelve, Our product candidate for the treatment of narcolepsy, we continue to expect top line results from the pivotal Phase 3 SINFONI trial in the first half of this year. With AXS-fourteen, our product candidate for the treatment of fibromyalgia, manufacturing and other activities related to preparations for the planned submission of an NDA are continuing, and we expect to be in a position to submit the NDA for this product candidate in the second half of this year. With regards to AXS-five For the treatment of Alzheimer's disease agitation, enrollment in the Phase III ADVANCE II trial is progressing, and we anticipate completing this trial in the first half of 2024. In addition, we plan to initiate a Phase twothree trial of AXS-five in smoking cessation in the Q4 of 2023. In sum, we expect the next 12 to 18 months to be eventful as we drive the commercialization of Avelity and Sunosi and as we advance our research and development pipeline.

Speaker 2

I will now turn the call over to Nick, who will provide details of our financial performance.

Speaker 3

Thank you, Herriot, and good morning. Today, I will discuss our Q1 results provide some financial guidance. Total revenue in the Q1 of 2023 was $94,600,000 consisting net sales of our 2 commercialized products, Avelity and Sunosi, the revenue from the Sunosi Europe and MENA out licensing agreement signed with PharmaNOVIA and royalty revenue from Sunosi sales recorded by Pharmanovia. Velvety net sales in the Q1 were $15,700,000 There were no net sales in the comparable period. Sunosi revenue for the quarter was $13,200,000 U.

Speaker 3

S. Sunosi sales were $11,200,000 International Sunosi revenue was $2,000,000 including approximately $300,000 in royalty revenue from Sunosi sales in the out license markets. As a reminder, There was a change in the distribution model during the quarter, which negatively impacted Sunosi net sales by an estimated $3,300,000 There were no net revenues in the comparable period for Sunosi. Cost of revenue was $7,600,000 in compared to none in the prior year. In addition to the manufacturing costs for Avelity and Sunosi, cost of revenue includes a Therefore, cost of revenue excluding this one time charge was approximately $2,600,000 Research and development expenses were $17,800,000 for the versus $12,600,000 for the comparable period in 2022.

Speaker 3

The increase was primarily related to higher personnel costs associated with reporting the ongoing clinical trials, post marketing commitments for Sunosi and Avelity and non cash stock compensation expense. Selling, general and administrative expenses were $74,200,000 for the Q1 versus $25,700,000 for the comparable period in 2022. The increase was primarily related to commercial activities for Avelity and Sunosi and higher non cash stock compensation expense due to the build out of both commercial teams. Net loss for the Q1 was $11,200,000 or $0.26 per share, compared to a net loss of $39,600,000 or $1.03 per share for the comparable period in 2022. The decrease in net loss for the Q1 versus the comparable period was primarily due to product sales from Avelity and Sunosi, offset by higher selling, general and administrative expenses related to these commercial activities and license revenue received from Pharmanovia.

Speaker 3

We ended the quarter with $246,500,000 in cash and cash equivalents compared to $200,800,000 as of year end. During the Q1, we did not utilize our ATM facility. In January to reduce the interest rate and to extend the maturity and interest only periods while accessing a $55,000,000 tranche. We believe that our current cash balance, along with the remaining committed capital from the $350,000,000 term loan facility with Hercules Capital, is sufficient to fund anticipated operations into cash flow positivity based on our current operating plan. I will now turn the call over to Laurie, who will provide a

Speaker 4

Thank you, Nick, and good morning, everyone. We are off to a great start for 2023 And Q1 marked another exciting quarter for Axsome with continued commercial growth for both Avelity and Sunosi. We are pleased with the early metrics on Avelity, which all point to a strong launch with significant long term potential and with how the relaunch efforts on Sunosi are progressing. I will share key metrics from our commercial efforts for both brands, starting with Avelity, followed by Sunosi. The end of Q1 represents the 1st full quarter of sales for Avelity and only 5 full months post launch.

Speaker 4

We are still early in the launch, but remain highly encouraged by the consistent feedback from patients and HCTs. Approximately 31,000 prescriptions were reported in Q1 for Avelity, representing a growth of 2 98% in Q1 versus Q4. We saw prescription growth accelerate through increased depth with our early HCP adopters as well as increased breadth of new prescribers. At the end of Q1, Avelity's prescriber base grew to over 6,000 unique HCP writers versus 2,200 unique HCPs at the end of Q4. HCPs wrote prescriptions for over 15,000 new patients in Q1, bringing the total number of unique patients on Avelity to over 21,000 at the end of Q1 versus 6,000 at the end of Q4.

Speaker 4

Our highly experienced sales force continues to drive adoption by educating HCP on the product profile of Avelity Through high impact engagements such as detailing and peer to peer speaker programs, our sales force has now reached over 22,000 HCPs With regard to payer coverage, coverage for Avelity across all channels is currently approximately 65% of all covered lives. In the commercial channel, which is expected to be the primary channel for Avelity, coverage is now at approximately 40% of covered lives, and we look forward to additional formulary decisions in the coming months. In the Medicaid and Medicare channels, approximately 100% of lives are now covered. Overall, payer coverage for Avelity is proceeding as expected during the standard 6 to 9 month post launch period, and we expect additional formulary decisions in the coming months. We remain pleased and extremely encouraged by the initial launch progress and are steadfast in our commitment to our large focus of driving HCP adoption, empowering patients and enabling quality access.

Speaker 4

Major depressive disorder, or MDD, is highly prevalent in a major public health concern with a mental health crisis that the U. S. Is currently facing. 21,000,000 U. S.

Speaker 4

Adults were diagnosed in 2020 and there is a reported significant increase in prevalence as a result of the pandemic. Avelity is an important new therapeutic option for patients living with this chronic and devastating condition, and we are proud of our efforts to make Avelity available to patients living with MDD and their positions. Turning to Sunosi. In the 1st quarter, Total prescriptions for Sunosi in the U. S.

Speaker 4

Grew 13% year over year and 4% quarter over quarter. Sunosi generated this growth despite a flat overall market and typical Q1 challenges. Payer coverage for Sunosi remains broad with 96% of commercial lives and 83% of total lives covered. Excessive daytime sleepiness and obstructive sleep apnea and narcolepsy and a person only wake promoting agent proven to improve wakefulness through 9 hours. Sunosi is the only branded therapy available for patients who suffer from EDS and OSA, and we expect our increased and enhanced promotional and disease education efforts to drive continued growth for the product in 2023.

Speaker 4

We recently launched our new all data campaign for Sunosi. The new campaign includes updated creative content, additional HCP and patient support tools and new educational resources. Launching this new campaign is an important next step in the relaunch of Sunosi, and I look forward to updating you on our commercial efforts and results related to the Sunosi relaunch in the coming quarters. Our 2 commercial products, Ovelity and Sunosi, address serious, I will now turn the call back to Mark to lead the Q and A discussion.

Speaker 1

Thank you, Laurie. Operator, may we please have our first question?

Operator

Thank you. Our first question is coming from Charles Duncan from Cantor Fitzgerald. Your line is now live.

Speaker 5

Hey, good morning, Herriot and team. Congratulations on, yes, great quarter. For Avelity, nice to see out of the gate. I had a couple of questions, 1 commercial, 1 development or pipeline. Regarding the commercial question on Avelity, I'm wondering if Laurie can provide any more granular feedback on what She has heard from prescribers hearing from patients in terms of those patients have been on other drugs in the past and how this

Speaker 4

Hey, Charles. Good morning and thanks for the question. So I think the best way to answer that is To one, take a look at script trends and how many patients we actually added in Q1. We added over 15,000 patients in Q1 and so physicians are clearly seeing a benefit of the product. So we're also seeing a really healthy refill rate right now.

Speaker 4

And I think that's really going to speak to the persistence and compliance. It's still a little bit too early in Q1 was only 5 months into launch, still a little bit too early to see true trends on open consistency and compliance, but the refill rate is really healthy.

Speaker 5

And I guess I can assume can we assume that now almost halfway Through the Q2, you feel pretty good about doing the business?

Speaker 4

Absolutely. As I mentioned in the prepared remarks, We are really heavily investing in the optimization of the product in terms of all the Omni channel approach we're taking from a marketing standpoint, strategic media, congresses, speaker programs, our field force with high impact engagements And I qualify high impact engagements with either detailing the physician and or speaker programs. They've reached over 22,000 HCPs and that's a lot of HCPs with. And we're really happy.

Speaker 5

And moving to the pipeline, I struggle to ask just one question, but I will ask just one question for Herriot Because you've got a lot of things going on, I guess on 2005, let's talk about that. You mentioned The phenotype of the patient that you're enrolling and if you can provide us any color. And then if you've learned anything from the recent rig salty ad Tom, in terms of Alzheimer's agitation, how does that impact change or not Your strategy with regard to 05 and Alzheimer's agitation?

Speaker 2

Thanks Charles for the questions. With regards to the types of patients that we are enrolling in ADVANCE II, I think we're we feel comfortable that we are enrolling a very similar type of patient as we enrolled in ADVANCE-one. The protocols are very similar. The Entry criteria are very similar. I think the team is executing on enrolling the study and making sure that we have the right patients and that we have of Quality Trial again.

Speaker 2

With regards to any learnings from the recent panel, There are a few observations. One is it became clear or it's been clear to us, but now I think it's been made publicly clear that the FDA as well as experts Really feel that this is a high unmet medical need. So what panel highlighted was the seriousness of the condition and the quandary frankly that physicians find themselves in with no drugs that are approved and the only drugs that are used off label Broadly, our antipsychotics which are problematic. So it's gratifying To be able to share that a little more broadly that awareness. The other learning from the panel is that The way that we are going about developing the product is consistent with how the FDA views that it should be developed in terms of endpoints.

Speaker 2

And again, this is not anything which is new to us because we've always worked very closely with the FDA for this breakthrough therapy designated product candidate. But it's nice to see those points discussed in a public forum.

Speaker 5

Very good. It's consistent with our past diligence. So appreciate the added color

Operator

Thank you. Our next question is coming from Jason Gerberry from Bank of America. Your line is now live.

Speaker 6

Hi, good morning. This is Dina on for Jason. Congrats on the progress this quarter and thank you for taking our question. Just a couple on Avelity here. How much Did Avelity 1Q benefit from inventory stocking?

Speaker 6

And do you have a firmer handle On the full year gross to net pricing dynamics or is that still more of a second half of the year event when you get to more normalized rates? Thank you very much.

Speaker 3

Hey, Gina, it's Nick. Thanks for the question. The performance for Avelity was not impacted by changes in inventory level. As we stated previously, normal inventory levels are at around 2 weeks. And during the quarter, there was actually a modest decrease in days on hand of Avelity on the to the distributors.

Speaker 3

So overall, it was not impactful at all to the net sales. In contrast for Sunosi, as we mentioned, there was an impact of $3,300,000 due to the change of title. Reported sales would have been $3,300,000 Additional, had there been no change on that? And I think your second question related to how do we think about We're still not currently in a position to give specific guidance around GTN as it's going to be volatile In the short term, obviously, there's coverage mix that's going to be sorry, there's mix and channel throughout the year that we're going to have distribution. Coverage is going to be dynamic and coming online as we've seen it.

Speaker 3

It's going to continue to come online throughout the year. Then also the utilization of the copay card. So while we are pleased with GTN this quarter, we don't expect it to improve in the near term.

Speaker 6

Great. Thank you so much and congrats again on the progress this quarter.

Operator

Thank you. Our next question is coming from Marc Goodman from SVB Securities. Your line is now live.

Speaker 7

Yes. Could you give us a sense Of commercial coverage, how you're planning that? I know that it's been kind of a slow process at the beginning on purpose. I was wondering, is this going to speed up as the year progresses? And how much of an impact did volumes get helped by the one contract that you've talked about already?

Speaker 7

And then Second question is just the SG and A run rate in the quarter. Just give us a sense of is that the run rate going forward? Should we

Speaker 4

Yes. Hey, Mark. Good morning. I'll address the first question and then pass it over to Nick. So as we stated before, we have expected Access to start coming online around 6 to 9 months post launch and given we are barely at 6 months when we're at 65% We're feeling pretty good about where we're at with lives covered and we do expect that to continue to evolve over the course of the next 2 months to the rest of the year.

Speaker 4

I want to talk about just volumes in terms of the contracts that we had in place. We don't necessarily look at it that way. I'll give you some numbers to think through. And that is 90% of patients who've been prescribed Avelity are first line have failed first line therapy. 60% of patients are second and third line.

Speaker 4

And this is exactly where we would expect patients to be right now. 1, because there is an urgent and unmet need out in the marketplace, But to as they work through formulary access. And so we are seeing a healthy amount of patients using the product Later line, obviously, with nice success and the continued improvement in terms of moving the line of therapy up. Part of that is helped by the fact that we have a robust patient support services program in place and the patient support services program is really in place to make sure that

Speaker 3

2nd part of your question on the SG and A, in actually Q1, we did have some one time charges as related to the Pharmanovia license. While we're not offering specific guidance for the rest of the year, I would point you to taking a look at what we spent in Q4

Operator

Thank you. Our next question is coming from David Amsellem from Piper Sandler. Your line is now live.

Speaker 8

Thanks. So a couple for me. On Avelity, can you just talk to qualitatively the kinds Patients who are getting the drug in terms of how many prior treatments you're seeing prior exposure to SSRIs, SNRIs, And then secondly on reboxetine, I'm trying to tease out Treatment landscape and particularly given that there's some mechanistic overlap with Sunosi, as you think about narcolepsy, where do you see reboxetine fitting in commercially, of course, assuming that there's clinical success? Thank you.

Speaker 4

Hey, David. I'll take the first one and then Over to Herriot. So as I just mentioned to Mark, right now we're seeing 90% of patients have failed one therapy, but that's not unusual Exactly as we had expected. 60% to 65% have been on second and third line therapies prior. And so we are seeing later line use, which is As we would expect coming out of the gate, again, this is consistent with the unmet needs in that patient population.

Speaker 4

We are seeing obviously success As objective evidence shows from refill rates, as well as what we're hearing from the field. And as we Access opens up and physicians get clinical experience, we do anticipate that availability will move up on the underlying usage.

Speaker 2

Great. And with regards to AXIS-twelve or voxetine, you mentioned meca sickle lap With Sunosi and how would we think about the 2 products? So reboxetine is being developed for narcolepsy, primarily for cataplexy. So what we saw in the Phase II trial was that there was a robust effect on cataplexy and also an effect on excessive daytime sleepiness.

Speaker 9

As a

Speaker 2

reminder, Sunosi has robust effects on excessive daytime sleepiness, but is not approved to treat cataplexy. So the 2 products that would be complementary. Now we like the profile that we saw And we're looking forward to seeing what the results of the Phase And that's going to inform us in terms of the full profile of the product.

Speaker 8

That's helpful. If I may sneak in a follow-up, do you think reboxetine on cataplexy has to be markedly better than what we typically see for off label uses of Do we uptake inhibitors like venlafaxine and duloxetine? Because I know there is some off label use. How do you think about that?

Speaker 2

That's a hard question to answer because there have been no controlled trials with any of those So a lot of it is anecdotal. And what we can speak to is the profile of our product. And we think The profile is very attractive. So a drug which has an effect on both cataplexy as well as excessive daytime sleepiness, which is dosed during the day, which does not have a lot of the scheduling or a lot of frankly the serious side effect concerns The agents are currently marketed.

Speaker 8

That's helpful.

Operator

Thank you. Your next question is coming from Joon Lee from Chua Securities. Your line is now live.

Speaker 10

Hey, thanks for taking our questions and for the updates. Sorry if I misheard, but I think I heard Laurie just say that 90% of the patients Have failed at least one therapy before getting on Avelity. Does that mean that there are 10% who get Avelity as first line therapy? I just want to make

Speaker 4

There's always going to be some early line use. It It could be either data reporting or it could just be patients who are paying out of pocket potentially. It could also be medical necessity, writing through You're getting through to that line. This is just reported data that we're seeing and we're seeing 90% are have failed one prior therapy, which is exactly what we would expect at

Speaker 10

Well, has that share of first line use gone up over time?

Speaker 4

No, it's actually gone down.

Speaker 10

Okay, got it. And at high level, Avelity gross to net for Q1 looks like around 50%. Is that in the ballpark? And So could we expect further improvement in that gross net or are we given you're already at the more or less steady gross net? Thank you.

Speaker 3

Hey, June. Yes, I think what I actually said is the GTN is in the high upper 50s is where it was for Q1 and we wouldn't expect that to materially change or improve in the next future quarters.

Speaker 10

Thank you.

Operator

Thank you. Next question today is coming from Vikram Purgett from Morgan Stanley. Your line is now live.

Speaker 11

Hi, good morning. Thanks for taking our questions. So First, just a quick clarification question for ADA. Could you just remind us exactly which data sets you plan to include in The eventual filing for ADA, assuming your data set with ADVANCE-two matures positively. And then Secondly, for AXS-twelve in narcolepsy for the SINPONI data readout you expect in the coming months, Could you remind us what the study is power to demonstrate and what you would consider a strong clinically meaningful outcome here?

Speaker 11

Thanks.

Speaker 2

Thanks for the questions. With regards to Alzheimer's disease agitation, In the filing, so in the S and D filing, we would include the results from all the studies that we conducted. As a reminder, we've completed the AVANCE-one trial, which is A pivotal trial, the ADVANCE II trial, those data will also be included. So that mirrors the ADVANCE-one trial, also data from the ACORE trial will be included, as well as data from the open label Safety extension trial, so the long term open label safety extension trial. So it will be up a pretty full package And we look forward to reading out the ADVANCE II trial and if that's positive then filing the sNDA.

Speaker 2

And

Speaker 1

With regards

Speaker 2

to AXS-twelve in terms of the powering of the study, So the study is 90% powered to detect a change in On the cataplexy endpoints, so that's the primary endpoint. So we've not disclosed what that delta is that we are expecting. But what we can point you to are the results from the CONCERT trial, the Phase 2 trial. And it was based upon those results

Operator

Thank you. Next question is coming from Yatin Suneja from Guggenheim Partners. Your line is now live.

Speaker 9

Thank you. A couple of questions for me. I I don't know if you articulated what the exact gross to net was or what the approximate gross to net was for Q1, so that's one. Any thoughts on providing guidance For sales for Avelity, when you might do that? And then if you can articulate for us the cadence of patients, Whether it's a weekly cadence or a monthly cadence, where it is, how

Speaker 2

do you expect that to change over time?

Speaker 3

Again, gross to net frivolity in the quarter was in the high upper 50s. This was an improvement from the 60s in Q4 And it was due to a higher proportion of refills of scripts versus new scripts. Again, we're very pleased obviously with the GTN this But we don't anticipate it's going to improve in the near term. And then as it relates to sales guidance, we're in the early very early stages of the launch Along with acquiring Sunosi just up to a year now and as such we find it just real premature to provide any such guidance as there's multiple variables that can affect This number, I think, Laurie, you want to answer the last question?

Speaker 4

Yes, yes. Not 100% sure. You mean by the question, but the scripts are written on a monthly basis, so patients are we are tracking monthly prescriptions.

Operator

Thank you. Next question is coming from Joseph Thome from TD Cowen. Your line is now live.

Speaker 8

Hi

Speaker 9

Maybe the first one on AXS-twelve. I know you said the focus was And then just as you think about the filing package, if these data are positive here, can you comment on the Safety database and sort of CMC metrics, are you ready to file a submission if the data are positive or kind of where do

Speaker 12

you fall on that? Thank you.

Speaker 2

Sure. Thanks for the question. So when we report top line results historically, we've reported A number of different endpoints. So we don't expect the Symphony readout to be any different. So we'll try and provide as much information as We can given the constraints of reporting top line results from large datasets.

Speaker 2

And with regards To the filing package, in terms of the safety database, we still need to finalize with The FDA, what would be included in the safety database, but preliminarily, we have a lot of safety data. So we're conducting we're collecting safety Data not only from the studies that we have conducted, but also as a reminder, we did in license a very large patient safety database for reboxetine through our Pfizer agreement. And on the CMC front, things are Progressing well there. So we do manufacture, we do synthesize the API for ourselves. So right now that's been going smoothly and everything's been going smoothly on the CMC side.

Speaker 2

And then with regards to when we would actually be able to file an NDA, a gating factor will be the completion of The long term safety study. So assuming that we do have success with the SYMPHONY trial, We would expect being able to file an NDA likely in 2024.

Speaker 9

Great. That's very helpful. Thank you. And then maybe, Maury, definitely helpful on the prescriber base and sort

Speaker 5

of unique writers. Can you go into a little bit more detail in terms of

Speaker 9

how physicians are Prescribing this, are they trying it first in one patient and then if that goes well, they go in other patients. Once you get a writer, Did they write a lot of prescriptions? Kind of how is it getting these physicians on board? And how will that change kind of for the duration of

Speaker 3

the year, do you think? Anne, thank you.

Speaker 4

Yes. Yes, it's a great question. So consistent with expectations of launch, you have your early adopters that come out of the gate And those if they have clinical success, those have they have tremendous depth. And we are seeing exactly that. The writers out of Britain, they have really Incredible market share in terms of their use of ABILITY, so they're seeing positive clinical experience.

Speaker 4

And then as you move further along with the launch and you're trying to increase your breadth, then you start seeing riders that are on an adoption curve that may need a little bit more Time and market, understanding peer influence or they may need clinical experience from one patient before they write more. So we're starting to get into that and our breadth is starting to grow. As I mentioned, In Q1, we added 3,800 new unique HCP writers. And so we definitely expect that to continue Just as a normal adoption curve would progress.

Speaker 13

Perfect. Thank you very much.

Operator

Thank you. Next question today is coming from Greg Suvanes from Mizuho Securities. Your line is now live.

Speaker 13

Thanks so much. Congrats on the quarter. I had a couple of questions. Just wanted to get a sense of maybe philosophically where you are in terms of your commercial infrastructure and whether given the opportunity, you're intend to keep its size the way it is right now? Or do you feel that perhaps you can be opportunistic and further drive Even perhaps better uptake of Elodie in particular?

Speaker 13

And then secondly, just wanted to get a sense of just going back to the gross to net and maybe just for clarification on my end, just Can you tell us how exactly you go about calculating your gross? And I just want to make sure that I'm thinking about the same way you're thinking about it. Thank you.

Speaker 4

Nick will sit up first. Cool.

Speaker 3

Hi, Craig. So GTN, I mean, it's Basically, it's the way everybody else would essentially calculate gross to net. It's based on demand in the quarter and The utilization of copay card, any type of rebates, any additional adjustments as well, that all goes into GTN. We would also Approved for anything that was sold in the quarter that's sitting in the channel that has not been distributed to the pharmacies at that point. So That would also be considered part of the GTN adjustment for the period.

Speaker 3

Gloria, you want to answer the second one?

Speaker 4

So I'm not sure if you're meaning the Avelity field force or the Sanofi field force, but I'll try and answer both because the answer is pretty applicable across both. So Just to give you some perspective on the Avelity side, there are about 50,000 HCPs who prescribe really the lion's share of branded therapies. We are calling on 25,000, 26,000 HCPs, of those 50, but those 25,000 that we're calling on, they write almost 70% of the branded therapies. Our DCC platform It was intentionally structured so that we could maintain a share of voice either through reach or with our omni channel marketing of field forces, in some cases, 2 times the size of what we have. Remember our DCC platform is really set up so that we can optimize productivity through effective and efficient engagements.

Speaker 4

And right now we are seeing that with our HCP targets As we're able to reach as many targets as again sales forces that are somewhat upwards of 2 times the size that we have right now. So as we are continuing to invest in both Avelity and Sunosi through omni channel marketing, strategic media, Congress spending, speaker programs, as I've mentioned before, we will obviously continue to make sure that we're maximizing the opportunity for both products.

Speaker 2

Yes. And what I would just add to what Laurie said is that right now, Our marketing efforts and the yield from that is going exactly as we had expected, exactly as we had planned. We've said before that our field force sizing and targeting was based upon All of the data and information that we've looked at through our DCC platform. And so we feel that we are More than adequately resourced right now. We're very happy with the way that the launch is going.

Speaker 2

Obviously, anything can change and we are an organization that can

Operator

Thank you. Next question is coming from Myles Mentor from William Blair. Your line is now live.

Speaker 14

Thanks for taking the questions. Congrats on the quarter. Can you just comment on the proportion of those 31,000 scripts for Avelity that are being reimbursed or seeking reimbursement Through the commercial versus government channels and does that differ materially from the broader branded antidepressant market which I think is 2 thirds Commercial One Third Government.

Speaker 4

Yes. Hey, Myles. We are seeing exactly almost exactly what we see The broader antidepressant category is about 60% to 65% commercial and the remaining the government channel and that is Spot on, we may be skewing a little bit heavier to commercial. I think we're around 70% right now, but it's exactly as expected.

Speaker 14

Okay, cool. And then the second one is just on the SYMPHONY trial. You mentioned that powering assumptions are based on like during Does that mean that the baseline cataplexy rates over the week are going to be similar between those two trials when they read out?

Speaker 2

So the entry criteria are similar. And whether or not The actual numbers are the same that remains to be seen, but the entry criteria are similar. There's a lot of variability with regards to cataplexy in patients. And part of the reason for that is that Cataplexy, although it is a symptom that everybody has, it is triggered. So there'll be variability from amongst individual patients based on their social situations.

Speaker 14

Beautiful. Thanks for the questions.

Operator

Thank you. We have time for 2 more questions. Our next question is coming from Matt Kaplan from Ladenburg Thalmann. Your line is now live.

Speaker 12

Hi, good morning and congrats on the results of the quarter. Just wanted to zero in a little bit on Sunosi and saprometazole In the ADHD indication and any plans for the Phase 3 program, can you talk about a little bit about The indication and the need there and then your Phase 3 program, the initial study, would that be potentially sufficient for

Speaker 2

Thanks, Matt, for the question. So, ADHD is a very large market. There are roughly 12,000,000 patients in the U. S. Who have And right now, they are treated either with stimulants, which have Issues with regards to the diversion and because they're highly controlled, These are drugs that are very effective that have a very large effect size, but then they are the downsides from a safety perspective.

Speaker 2

And then there are the non stimulant medications. The non stimulant medications, What they suffer from are lower effect sizes. So there is a very large need still for effective drugs that are both effective and also that have a very good safety profile. We like Sunosi Based on the comparison, let's say, in other indications, so in excessive daytime sleepiness, for example, where the clinical trial results show that it appears to be superior agent to other drugs, so to other weight promoting agents, for example. And we also very much like the results from the SHARP study, which recently read out where we look specifically at cognition in patients with OSA.

Speaker 2

So it's not directly analogous, but we like the clinical profile of the drug in other indications. We like the mechanism of action of the drug. Also, we recently announced that it hits TAR-one, which in preclinical models have been shown to be pro cognitive. So there's a lot there that we hope to test in the upcoming trial, which we expect to start this quarter. And then with regards to what would be needed in order to file, so to file an NDA or an SNDA for drug in ADHD, you also do need to demonstrate efficacy in a pediatric population.

Speaker 2

So the study that we're about to launch That is a study in adults and we will be also looking to initiate a study of pediatric patients to enable a filing.

Speaker 12

Okay. That's very helpful. And then A quick question for Rory. In terms of some near term NDA filings, Can you talk about the launch prep you have underway for AXS-seven and potentially 14 as well, given the timing of those NDAs and filings?

Speaker 4

Yes. Thanks for the question. So 2,007, if you remember, we got all of us up to the finish line. So launch prep was Pretty heavily done there. So in terms of marketing materials and preparation for the market and understanding, That's all just we need to do a refresh.

Speaker 4

Based on timing for both 7 and 14 will be when we decide size, So once we have a little bit more understanding on exact timing and dates, then we'll share what that looks like.

Speaker 12

Thanks for taking my questions.

Operator

Thank you. Our final question is coming from Raghuram Subraju from H. Wainwright, your line is now live.

Speaker 9

Hi. This is Boobalan guiding in

Speaker 15

for Ram Selvaraju and thanks for taking our questions. A couple from us. So firstly, I'd like to give your thoughts on intracellular therapeutics, Lumateperone, which produce ex-05 on this recently reported data.

Speaker 2

Thanks for the questions. With regards to Lumateperone and the data In mood disorders, it's not surprising that an antipsychotic Would work in depression. So I think it's well known that atypical antipsychotics are used as Adjunctive treatment. So and anytime, any company generates Data in depression or in bipolar depression, which is positive, we think that that's a great thing because there is The need is so large and the patient population is so large. And there's such a large amount of heterogeneity in terms of response from patients.

Speaker 2

So, yes, so that's great and let's have more of that.

Operator

I'll go back over to management for any further or closing comments.

Speaker 2

Well, thank you again for joining us on the call today. We saw strong in all areas of our business in the Q1. We are executing on the commercialization of Avelity and Sunosi and we are advancing our late stage pipeline to key milestones in multiple indications. Our marketed and development portfolio positions us to have potentially at least 5 marketed products By 2025, targeting brain disorders that affect tens of millions of people. And also these are conditions where there's still a great unmet medical need.

Speaker 2

So we look forward to updating you on our progress during the rest of the year. Have a great rest of your day.

Speaker 3

Thank you.

Operator

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.

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Earnings Conference Call
Axsome Therapeutics Q1 2023
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