Axsome Therapeutics Q4 2024 Earnings Call Transcript

Quartr
Provided by Quartr
February 18, 2025

There are 18 speakers on the call.

Operator

Good morning, and welcome to the Axsome Therapeutics Fourth Quarter and Full Year twenty twenty four Conference Call. Currently, all participants are in listen only mode. Later, there will be a question and answer session and instructions will be given at that time. As a reminder, today's conference call is being recorded. I'll now turn the call over to Darren Oplund, Director of Corporate Communications at Axsome Therapeutics.

Operator

Please go ahead.

Speaker 1

Thank you. Good morning and thank you all for joining us on today's conference call. This This morning, we issued our earnings press release providing a business update and details of the company's financial results for the fourth quarter and full year of 2024. The release crossed the wire a short time ago and is available on the Investors section of our website, along with the earnings presentation accompanying today's call. Those joining via webcast may advance through the slides at any time during the discussion.

Speaker 1

During today's call, we will be making certain forward looking statements regarding, among other things, the efficacy, safety and intended utilization of our investigational agents 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, commercial plans and possible intended use of cash and investments. These forward looking statements are based on current information, assumptions and expectations of future events that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. 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 rely on these forward looking statements, which are made only as of today's date, and the company disclaims any obligations to update such statements. Joining me on the call today are Doctor.

Speaker 1

Ariel Tabito, Chief Executive Officer Nick Pizzi, Chief Financial Officer Ari Maisel, Chief Commercial Officer Hunter Murdoch, General Counsel and Mark Jacobson, Chief Operating Officer. Ariel will begin with opening remarks, including an overview of the important progress we've made in 2024 and a look ahead into the rest of 2025. Following Ariel, Nick will review our financial results and then Ari will provide a commercial update. We will then open the line for questions, which will be taken in the order they are received. And with that, I'll turn the call over to Aria.

Speaker 2

Thank you, Darren, and good morning, everyone. In the last two point five years as a fully integrated R and D and commercial organization, Axsome has both expanded and deepened its leadership within CNS. Our portfolio today comprises three differentiated in market products, three innovative product candidates in regulatory submission stage and numerous ongoing Phase III trials. This broad portfolio positions us to potentially commercialize seven products or indications through 2027, allowing us to deliver significant innovation to patients and value to shareholders. Twenty twenty four was another year of strong execution for Axsome.

Speaker 2

For the year, we delivered total net product revenue of $386,000,000 reflecting high double digit year over year growth for Avelity and Sunozi. We expect continued growth in 2025, supported by our second completed sales force expansion for Avelity, further improvements in market access dynamics and increasing awareness of our differentiated products. Based on the recent performance, Avelity is on track to reach blockbuster potential. Most recently, we received U. S.

Speaker 2

Approval of Simbravo on January 30, representing a novel oral acute treatment for migraine. Based on its clinical profile, Simbravo represents an important development for patients living with migraine. With Simbravo, we now have three commercial stage products and are actively preparing for its commercial launch. Before turning the call over to Nick and Ari, who will expand on the strong financial and commercial performance in the year, I'd like to provide an update on our rapidly advancing late stage pipeline and speak about key priorities for 2025. '20 '20 '4 was highly productive from a clinical development perspective.

Speaker 2

As we read out five pivotal trials and initiated three Phase III trials across our portfolio. Our R and D execution in 2024 positions us to potentially deliver several important milestones in 2025. Starting with AXS-five for the treatment of Alzheimer's disease agitation, last year, we completed a Phase III clinical program in this indication, which consisted of four controlled Phase III efficacy trials in a long term safety trial. With the positive results from this comprehensive program in hand, we plan to submit an NDA for AXS-five for the treatment of Alzheimer's disease agitation to the FDA in the second half of twenty twenty five. Moving on to AXS-twelve for the treatment of North Alexey with cataplexy.

Speaker 2

Last year, we also completed the clinical program for the Sperata candidate, which included three controlled efficacy trials and a long term safety trial. Based on the positive results from these studies, we plan to submit an NDA for AXS-twelve for the treatment of cataplexy in patients with narcolepsy to the FDA in the second half of twenty twenty five. As it relates to our NDA for AXS-fourteen in fibromyalgia, we are in the publication stage of the submission and expect to submit the NDA to the FDA this quarter. Apart from the activity related to these NDA submissions, we anticipate top line readouts from several Phase III trials in the near term. These include the IMerge Phase III trial evaluating SimBravo in patients with prior inadequate response to oral CGRP inhibitors, the BOCUS Phase III trial of solriamfetol in ADHD and the PARADIGM Phase III trial of solriamfetol in major depressive disorder.

Speaker 2

Top line results for all three of these studies are on track for the first quarter of twenty twenty five. Enrollment for the ENGAGE study of solriamfetol in binge eating disorder and the SUSTAINED study of solriamfetol in shift work disorder continue to progress with top line results for both studies anticipated in 2026. All in all, across our development portfolio, we expect NDA submissions for three product candidates and top line readouts from three Phase III trials in the coming months. I'm proud of the excellent progress we've made as an organization and look forward to another transformative year as we build upon our commercial success and advance our CNS pipeline. With that, I'll hand the call over to Mick.

Speaker 3

Thank you, Ariel, and good morning. Today, I will discuss our fourth quarter and full year '20 '20 '4 results and provide some financial guidance. Total product revenues were $118,800,000 and $385,700,000 for the fourth quarter and full year, representing year over year growth of 6688% respectively. This consisted of net product sales of $117,300,000 and $381,700,000 for the fourth quarter and full year of 2024 and royalty and milestone revenue of $1,400,000 and $4,000,000 respectively. Total product revenues for the comparable periods in 2023 were $71,500,000 and $204,900,000 Avelity net product sales were $92,600,000 and $291,400,000 for the fourth quarter and full year of 2024, representing 89124% year over year growth.

Speaker 3

Avelity net product sales for the comparable periods in 2023 were 49,000,000 and $130,100,000 Sunosi net product revenues were $26,200,000 and $94,300,000 for the fourth quarter and full year of 2024, representing 1626% year over year growth, consisting of $24,700,000 and $90,300,000 in net product sales and $1,400,000 and $4,000,000 in royalty and milestone revenue associated with Sunosi sales in out licensed territories. Q4 includes a one time 500,000 regulatory based milestone earned by Axsome. Sunosi net sales for the comparable periods in 2023 were $21,700,000 and $72,400,000 Total Synosi revenue for the full year of 2023 was $140,500,000 which includes license revenue of $65,700,000 from out licensing Synosi in certain ex U. S. Territories.

Speaker 3

Total cost of revenue were $10,500,000 and $33,300,000 for the fourth quarter and full year of 2024. Total cost of revenue for the comparable periods in 2023 were $7,400,000 and $26,100,000 Q4 cost of revenue includes a one time $2,500,000 expense for the achievement of a sales based milestone related to worldwide Sunosi sales. Total cost of revenue for the full year of 2023 included a one time cost of $5,000,000 associated with the revenue received on out licensing Sunosi in certain ex U. S. Territories.

Speaker 3

Research and development expense were $55,000,000 and $187,100,000 for the fourth quarter and full year of 2024 respectively compared to $30,800,000 and $97,900,000 for the comparable periods in 2023. The increase was primarily related to the company's ongoing Phase three trials of solriamfetol in ADHD, MDD, binge eating disorder and shift work disorder, the advancement of Phase III trials of AXS-five and AXS-twelve, manufacturing costs for AXS-seven and AXS-fourteen, as well as higher personnel costs including non cash stock based compensation associated with organizational growth. Selling, general and administrative expenses were $113,300,000 and $411,400,000 for the fourth quarter and full year of 2024 respectively, compared to $86,800,000 and $323,100,000 for the comparable periods in 2023. The increase was primarily related to commercialization activities for Avelity and Sunosi, including sales force and marketing expenses and higher personnel costs, including non cash stock based compensation associated with organizational growth. Net loss for the fourth quarter of twenty twenty four was $74,900,000 or $1.54 per share compared to a net loss of $98,700,000 or $2.08 per share for the comparable period in 2023.

Speaker 3

The net loss in the fourth quarter of twenty twenty four includes $35,900,000 in non cash charges comprised primarily of $22,000,000 in stock based compensation expense and $11,000,000 in acquisition related contingent consideration expense. Net loss was $287,200,000 or $5.99 per share for the full year of 2024 compared to a net loss of $239,200,000 or $5.27 per share for the full year of 2023. The net loss for the full year includes total non cash charges of approximately $125,000,000 which includes $85,200,000 in stock based compensation expense, $28,100,000 in acquisition related contingent consideration expense and $6,400,000 in intangible amortization compared to $62,600,000 40 8 point 9 million dollars and $6,400,000 respectively for the full year of 2023. Avelty and Sunosi GTN discount in Q4 of twenty twenty four were both approximately 50%. Due to negative seasonality effects in Q1, we anticipate that GTN discount for Avelty and Sunosi to be in the mid-50s.

Speaker 3

We ended 2024 with $315,400,000 in cash and cash equivalents compared to $386,200,000 at 12/31/2023. We believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan.

Speaker 4

I would now like to turn the

Speaker 3

call over to Ari, who will provide a commercial update.

Speaker 4

Thank you, Nick. Axsome delivered another strong quarter of demand growth for Avelity and Sunosi in the fourth quarter of twenty twenty four, capping off a successful year of increased awareness and utilization of our medicines. For both products, patients and providers continue to report a significant positive impact on both symptoms and quality of life measures. Our performance throughout 2024 is a testament to the impact of Axsome's dynamic digital centric commercialization platform, which has enabled consistent growth across our portfolio and is poised to support the launch of Simbravo as an acute migraine treatment for adults in the coming months. Avelity once again led the market in total demand growth for the quarter with approximately 158,000 prescriptions representing 10% quarter over quarter growth and 87% growth compared to the fourth quarter of twenty twenty three.

Speaker 4

By comparison, the antidepressant market grew less than 1% sequentially and grew 2% compared to the fourth quarter of twenty twenty three. Nearly 26,000 new patients were prescribed Avelity in the quarter bringing the total number of new patients started on Avelity since launch to approximately 165,000. Our sales team successfully activated 4,100 new providers in Q4 with primary care providers representing the greatest source of prescriber growth. Avelity experienced meaningful positive impact of improved coverage dynamics in Q4 with increases in total covered claims. Avelity access is seventy eight percent of all lives across channels and 63% of lives in commercial.

Speaker 4

Importantly, our market access team is actively engaged with payers across the payer landscape to expand and improve access in 2025. Moving on to Sunosi, total prescriptions were approximately 49,000 representing 4% sequential growth and 16 growth versus Q4 twenty twenty three. By comparison, the agent market grew 1% sequentially and grew 5% compared to the fourth quarter of twenty twenty three. Approximately 4,100 new patients started Sunosi in the quarter, bringing the total number of new patients started on Sunosi to approximately 81,000 since launch. Approximately 400 new writers were activated in Q4 resulting in a total cumulative prescriber base of nearly 14,000 healthcare providers since launch.

Speaker 4

Payer coverage for Sunosi in Q4 was stable with eighty three percent of lives covered across channels. Finally, we are excited to launch our third product SimBravo in the coming months. SimBravo represents an innovative and highly differentiated treatment for migraine. Migraine remains the leading cause of disability among neurological conditions for the more than thirty nine million migraine sufferers in The U. S.

Speaker 4

And more than eighty percent of migraine patients discontinue their acute migraine treatment in the first year of treatment. Feedback from headache specialists and neurologists clearly position Simbravo as a compelling treatment option for patients who have been frustrated by the limited impact of existing treatments. We look forward to sharing additional details of our commercial launch plan soon. In closing, 2024 was a very successful year for Axiom, our second full year as a commercial enterprise and we are very pleased with the growth of both Avelity and Sunosi. Our robust commercial capabilities and innovative digital centric commercialization platform position Axiom to deliver on the promise of our pipeline and improve the lives of those impacted by CNS conditions.

Speaker 4

I will now turn the call back to Darren for Q and A.

Speaker 1

Thanks, Ari. Operator, may we please open the line for questions?

Operator

Thank you. At this time, we'll be conducting a question and answer session. You. And the first question today comes from the line of Ram Selvaraju with H. C.

Operator

Wainwright. Please proceed with your question.

Speaker 2

Thanks so much for taking my question. With respect to DTC promotional activities, whether those are for Avelity or Simbravo, can you comment on the cadence with which you expect those to be initiated? And what strategies you might employ in order to optimize the efficiency of DTC buys?

Speaker 4

Sure. Yes. Thanks for the question, Ram. As we've discussed previously, we intend to launch a broad based media outreach plan for AUBELITY this year in the coming months. And the way we think about it is ensuring that our spend is sufficient to drive awareness amongst patients and remain competitive in the depression market where most of the branded agents are advertising pretty broadly.

Speaker 4

In terms of sort of the media plan, we haven't commented on that specifically, but there are some calendar year seasonality considerations that we'll take into account and just make sure that when we are investing in media that it's during a time of the year that makes sense where patient flow in HCP offices is at a high level. Regarding Simbravo, we haven't commented on our commercial go to market plans yet, but expect to share some more details in the coming months.

Operator

Thank you. Our next question is from the line of Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Speaker 5

Yes. Good morning, Ariel and team. Thanks for taking the question and congratulations on a nice year for commercialization as well as the products for pipeline productivity. I had a question with regard to the sales force expansion for Avelity. I'm wondering if you could provide any color on the relative size or change and then whether or not that is going to create synergies with the prescriber base, the future prescriber base for SUBRABA and how that might happen?

Speaker 4

Sure. Yes. Thanks, Charles. So as we mentioned previously, we added approximately 40 additional representatives to the Opelaview sales team. That's about 10% to 15% increase in sort of the overall sales force size.

Speaker 4

And yes, I think your question about synergy with Zimbravo, particularly when you think about migraine treaters in the primary care setting, we do believe that there's some overlap that we'll be able to take advantage of. And so more to come on that, but one of the key aspects of our portfolio is the high overlapping comorbidities with depression across all of the indications that we're studying. And so there does create some synergy or efficiencies with certain providers.

Speaker 5

That makes sense. If I may just ask a quick pipeline question that's on AXS-five. You've mentioned second half of the year for submitting the NDA and I believe that that's gated by a stability test, so analysis ongoing. So I'm wondering if you have any greater color, would you anticipate that in third quarter or fourth quarter? I know you're really busy with a lot of NDA submissions now.

Speaker 6

Hey, Charles, this is Mark. Good morning. Thanks for the question. So just to clarify one thing is the rate limiting step is building the submission. It's not a stability time point.

Speaker 6

That's the gating factor. And second half, you can expect updates from us, but it is a top priority for the organization. So we'll be looking to do that as early in the second half as possible, but we'll provide more granularity as we get closer.

Speaker 5

Thanks, Mark. Thanks for taking the questions.

Speaker 6

Thanks, Charles.

Operator

The next question is from the line of June Lee with Churwood Securities. Please proceed with your question.

Speaker 7

This is Asim Rana on for June. Congrats on the quarter and thanks for taking the questions. Will the Alzheimer's disease agitation filing be an NDA or an SNDA? And then, have you had the pre NDA meeting for AXS AXS-twelve for narcolepsy and what are some of the labeling scenarios? Thank you.

Speaker 6

I'll take the first one. This is Mark again. So we haven't communicated the filing approach just yet, but you can expect to hear that from us in the not too distant future. And I'm sorry, could you repeat the second question on '12?

Speaker 7

Yes, sure. Just have you had the pre NDA meeting for AXS-twelve for narcolepsy and just some malignant scenarios that you might see? Thank you.

Speaker 6

We haven't yet confirmed the timing around the meeting. But I think as soon as we have outputs, we'll look to share that with you all. And scenario planning, I think we're so close, so that's or commenting on different scenarios, the hypothetical that we're so close, I think we can the future just share specifics with you on the strategy.

Speaker 7

Thank you.

Operator

Our next question is from the line of Joseph Thome with TD Cowen. Please proceed with your question.

Speaker 6

Hi there. Good morning.

Speaker 8

Congrats on the progress and thank you for taking my question. Maybe just given the upcoming data in ADHD, what is sort of a clinically meaningful change on the AISRS that you're looking for? And is Supernus' Calbri a good comp here in terms of, I guess, overall data package and sort of the progress of their launch? Anything different with, sorry, on the top that you can point out that might be particularly differentiated

Operator

would be helpful? Thank you.

Speaker 2

Sure. Thanks, Joe. We're very close to announcing results for the Phase III trial in ADHD. So a lot will depend upon what the results show. So we're just as excited as the rest of you to open the envelopes and learn about the clinical profile in a multicenter study.

Speaker 2

As it relates to what we're looking for with regards to the study, what we're looking for is this would be a positive trial. That is a study which meets its primary endpoint and we're not looking for any specific difference between the treatment arms. This is the first study that we are conducting with Solvionthol in ADHD. And

Speaker 6

as

Speaker 2

it relates to your question comparing it to Calvary, that remains to be seen. So we'll have to look at the data and we'll know soon.

Speaker 9

Thank you.

Operator

The next question is from the line of David Hong with Deutsche Bank. Please proceed with your question.

Speaker 10

Hi, there. Thanks for taking my question. Congrats on a successful quarter and fiscal year. I was wondering if you could just talk a little bit about the expectations for seasonal cadence of scripts and revenues for Avelity in 2025, particularly Q1 where we typically see some headwinds. How sales force expansion efforts might pull through and if you would feel comfortable providing forward looking guidance for the product at some point?

Speaker 10

Thanks.

Speaker 4

Yes. Thanks, David, for the question. In terms of seasonality from a demand standpoint, we do expect Q1 to be a growth quarter, but something somewhat slower growth than what we experienced in the back half of the year. We are optimistic of the impact of of the sales force expansion. We've already seen very good leading indicators in terms of sales activity, call activity.

Speaker 4

And if you recall from last year when we had another expansion, we started to see the impact of that team towards the end of Q1, which initially showed up as incremental growth in weekly NBRx or new patient starts. So we would expect something similar. I think historically when you look at the depression market Q1 and Q3, the summer months tend to be somewhat slower than others for the overall market. But Avelity is a growth brand. We expect to drive meaningful growth throughout the course of the year, but there will be some dynamics that the overall market will experience.

Speaker 3

Yes. David, it's Nick. As it relates to providing sales guidance, with the fluid nature of many of the market dynamics and unpredictability of external factors, which include payer coverage, field force expansion and other promotional efforts that could have material impacts. We don't plan to provide sales guidance currently. What we have shared, you could reference the deck that's been filed is that for Avelity peak sales for Avelity in MDD alone are in the $1,000,000,000 to $3,000,000,000 range.

Speaker 3

For Sunosi in its current indications, dollars 300,000,000 to $500,000,000 and then also for Simbravo zero point five billion dollars to $1,000,000,000 in peak revenue. So we remain confident in these ranges. And as we continue to commercialize, we can provide further guidance.

Operator

Thank you. The next question is from the line of David Amsellem with Piper Sandler.

Speaker 6

So my one question is this. So with the exclusivity runway for Avelity shored up and with good visibility to significant cash generation, how are you thinking about M and ABizDev in terms of your ability and willingness to bring in an asset or assets where you can leverage the commercial infrastructure that you have in place? Or alternatively, would you even bring in a development stage asset? Just let us know how you're thinking about that philosophically? Thanks.

Operator

Sure.

Speaker 3

Yes. Hey, David, it's Nick again. We are always looking for opportunities. We're obviously very satisfied with where we are with our late stage pipeline and our commercial assets, but something that potentially can complement something earlier stage in our pipeline, we are open to. We have a dedicated resources internally now to evaluate opportunities and that is something that's on our radar.

Operator

Thank you. The next question is from the line of Mark Goodman with Leerink Partners. Please proceed with your question.

Speaker 11

Nick, can you help us with how to think about expenses this year? And secondly, just on AXS-twelve second half for filing, can you just give us what the gating factors are to wait for that filing? Thank you.

Speaker 6

Yes, sure.

Speaker 3

Mark, it's Nick. So I'll speak a little bit about the OpEx and the quarter as well as in 2025. R and D spend was slightly higher during the quarter as we were closing out three ADA trials and continuing to progress on all the other programs. We anticipate the R and D spend peaked this quarter, Q4, and do expect R and D spend to moderate in 2025, given the conclusion of the ADA trials and other trials concluding in Q1. As it relates to OpEx, we do expect to see an increase versus Q4.

Speaker 3

However, we expect sales to increase at a faster rate, putting us on track to achieve cash flow positivity. We're starting to see leverage in the P and L and sales growing faster than OpEx, which we're super excited about.

Speaker 6

Good morning, Mark. With respect to ACEs 12 and the NDA, so we did share, we plan to have a pre NDA meeting with the FDA, so that's a component. But the rest is just building the modules and building the submission itself, the clinical program is done.

Speaker 2

So it's really a

Speaker 6

lot of back office work now in order to get to that filing date. And then the other consideration that I'll just mention is this is the same division as AD agitation, so you might expect that we'll be running some air traffic control in terms of how we're working to choreograph workflows and things like that.

Speaker 11

Thanks.

Operator

Our next question is from the line of Greg Savage with Mizuho Securities. Please proceed with your question.

Speaker 12

Thanks so much. Thanks for taking my questions. Congratulations on all the progress in the quarter in the past year. Just two quick questions for me. One, just on the PARADIGM study for solriamfetol and MDD, expectations there?

Speaker 12

And could you just remind us of the positioning, if you were to see a positive readout in MDD, the positioning of that product, especially vis a vis Avelity? And then just on SYMBRAVOVO, can you provide a sense of what you think the launch trajectory and uptake might look like? I think risotriptan is like the second most prescribed drug generically at least for migraine. And so would the expectation be a relatively smooth uptake or do you think it could be more gradual given maybe some education around the product? Thanks so much.

Speaker 2

Great. Thanks for the questions. I'll take the first one. As it relates to the PARADIGM study and expectations, this is a PARADIGM will be the first study that we're conducting with solriamfetol in MDD. So we're very close to having a readout, so we'll learn a lot from that.

Speaker 2

As it relates to potential positioning, as you know, soramfetol is approved to treat excessive daytime sleepiness. And there is a lot of overlap in terms of comorbidities between excessive daytime sleepiness and depression. So a natural fit or natural way to look at this product, if it were to have an effect in MDD would be to position it for patients who have those two comorbidities. So we've disclosed that one of the ways that we've conducted the study is to also look at patients who have EDS and MDD versus those who have MDD without EDS. And so that will provide us some very nice information about how the product works and how the mechanisms of action, which we think are very relevant, would translate clinically to appropriate patient population.

Speaker 4

Hey, Greg. This is Ari. So regarding the Zimbra uptake, obviously, there are we're very optimistic about the impact Zimbra will have on the acute migraine market. When you look at analogs, we believe the more recent launches are probably more accurate in terms of uptake. I'm referring to the oral CGRPs.

Speaker 4

The product does have a unique clinical profile relative to both the triptans as well as the oral CGRPs. So we do think that there is a very compelling position for the product. With that said, one of the things that you should think about when modeling ZINBRAVIO is we are being very targeted, very focused on headache specialists and neurology practices that make up roughly 70% of the overall branded market. And so and we'll be launching with something smaller than the two large oral CGRP competitors out there. So it remains to be seen exactly what the uptake will look like, but I do think that those are probably the closest analogs to assess.

Operator

Thank you. The next question is from the line of Vikram Khurit with Morgan Stanley. Please proceed with your question.

Speaker 9

Hi, good morning. Thanks for taking our questions. We had two on the pipeline. So first, going back to the ADA filing plan for the second half of the year, I know you're not guiding the specifics on the filing strategy, but could you help us understand, I guess, some of the regulatory and commercial factors kind of feeding into how you're thinking about NDA versus sNDA, what the practical implications could be of one path versus the other? And then secondly, I think your release mentioned that the AXS14 NDA submission is on track for 1Q25 for fibromyalgia.

Speaker 9

So I was just wondering if you could talk a bit about which patient segments AXS14 could be a good fit for within fibromyalgia assuming it's approved and what you see as the commercial potential there? Thank you.

Speaker 6

I'll start with the question about the different considerations for the filing strategy for AD agitation. It's cross functional, right? There are considerations with respect to brand names, there are considerations with respect to intellectual property, market access strategy and some regulatory considerations. So it really touches on every element of development and launch. And I think we'll be able to comment specifically in the not too distant future, which path we're taking.

Speaker 2

Yes. As it relates to fibromyalgia, one of the aspects of the disease is that it has multiple symptoms and the current treatment options do not adequately address all of those symptoms. So what's nice about the profile of AXS-fourteen to date is that not only does it reduce pain, but it also reduces it improves function and it reduces multiple symptoms of fibromyalgia. One key symptom of fibromyalgia that the data has shown could be really impactful to patients and that the AXS-fourteen does have an effect on is fatigue, which is very difficult to treat. And patients consider it to be one of the top three symptoms of fibromyalgia that results in their disability.

Speaker 2

So we're very excited about the potential for AXS-fourteen in fibromyalgia, especially given the large patient population.

Speaker 9

Got it. Thank you.

Operator

The next question is from the line of Jason Gerberry with Bank of America. Please proceed with your question.

Speaker 13

Hi, good morning. This is Dina on for Jason. Thanks for taking our questions and congrats on all the progress this year. We just had a couple on filriamfetol for ADHD. Just one follow-up regarding the Phase III clinical profile.

Speaker 13

Would your $1,000,000,000 to $1,500,000,000 in peak sales estimates change at all if we did see stimulant like efficacy in the PARADIGM trial, which is maybe around that twenty percent to 25% placebo adjusted benefit on AISRS endpoint? And then can you just remind us what your plans are for the adolescent population and maybe how we should be thinking about the size of the adult versus adolescent opportunity in terms of market share? Thanks.

Speaker 2

Sure. The ADC patient population is so large and that still remains underserved despite the various treatments that are available. Then we think that will be a very sizable market opportunity for solriamfetol should the studies be positive. So we're very close to having a data readout, so we look forward to learning more about the efficacy profile of the drug potentially in ADHD. As it relates to the pediatric population, as a reminder, we must generate data in the pediatric population in order to be able to submit an NDA to the FDA for consideration for ADHD.

Speaker 2

And so that is something that we plan to do. So we've talked about initiating that study and launching that study. In order to do that, we do need to get feedback from the FDA on the pediatric study plan and that is in progress.

Operator

Thank you. The next question is from the line of Leonid Timoshenko with RBC Capital Markets. Please proceed with your question.

Speaker 14

Hi, guys. Congrats on the progress. I just wanted to ask on maybe some additional color on the patent settlement around Avelity with Teva. I guess first, how did you end up deciding on sort of the 02/1938, '2 thousand and '30 '9 boundaries? And then maybe, you know, bigger picture, I guess, how does it change your peak assumptions for Avelity versus sort of what you put forth in the slide deck around both MDD and Alzheimer's agitation?

Speaker 6

So this is thanks for the question. This is Hunter. I'll take the first part first and then Nick,

Speaker 3

do you want to take that part? Great. So the dates were just a negotiated resolution. It didn't tie to a specific event or a specific occurrence. It was just what was sort of negotiated at an arm's length transaction type up.

Speaker 3

Nick, do you want to Yes. And with the recent developments on the LOE, we do plan to update and refine our guidance as the launch progresses and having the LOE day will help facilitate that process, so stay

Operator

tuned. Our next question

Speaker 6

is from

Operator

the line of Serena Chen with Wells Fargo. Please proceed with your question.

Speaker 15

Hi, thanks for taking my question. Wanted to ask about Zimbravo. Just given the high rebating environment around oral CGRPs, how should we think about factors that could impact net price and anything differentiated Axsome is doing to compete there? Thank you.

Speaker 4

Yes. Thanks for the question. We'll obviously have a lot more to share as we prepare for the commercial launch. But as you mentioned, this is a high rebate category. We also saw the oral CGRPs launch with significant free goods in the market.

Speaker 4

And so we've been able to study the dynamics of those launches to formulate our strategy and plan for engagement with payers. We feel very, very confident in the clinical profile of SimBravo. The fact that we have data across pain intensities, very compelling data, providing relief or pain freedom and freedom from most bothersome symptoms at two hours, extended to twenty four hours, there's a very strong clinical rationale for ZINBRAVOW. And in our early discussions with payers, we do see the potential to engage in access discussions for the brand. So we'll be able to share more as we get closer to the launch, but we are very mindful of building access while also making long term profitability for the brand and that's one of our key areas of focus.

Operator

The next question is from the line of Ami Fadia with Needham and Company. Please proceed with your question.

Speaker 15

Thanks for taking my question. With several assets in late stage, can you maybe just talk about your philosophy or how should we think about operating margin evolution over the next two, three years? And specifically just for this year as well with the launch of Simbravo, maybe if you can give us some more grander color on how to think about operating expenses, that would be helpful. Thank you.

Speaker 3

Sure. I'll handle I'll start with the second question first. Just as we successfully launched the Velvety, we're going to take a strategic approach in launching SimBravo and plan to continue to assess the investment over time. At first SimBravo, we're confident in our ability to execute with an efficient SG and A spend in 2025 by leveraging our DCC approach and we'll invest as needed to build consistent growth trajectory over the long term. The approval, subsequent launch of Sunbrava has always been factored into our cash runway.

Speaker 3

And as a reminder, our current cash does take us into cash flow positivity. As we think about operating margin over the

Speaker 4

next couple of years, we have the

Speaker 3

same strategy that we've always had with Avelity as well as Sunosi, very focused on ROI and being mindful of how we invest in each dollar within the SG and A as well as in the R and D function to ensure that we get the ROI top line.

Operator

The next question is from the line of Ethan Suneja with Guggenheim Partners. Please proceed with your question.

Speaker 16

Hey guys, thank you for taking my question. Congrats on all the progress. Just a question on AXS-twelve or robloxetine. Curious to hear how you are thinking about the narcolepsy market in general? I mean, we have gotten mixed feedback from the QL, specifically given that it is an SNRI.

Speaker 16

But you definitely have very interesting data that you have generated across multiple Phase III programs. So how should you how are you thinking about that program, the opportunity there and any impact from more actions that could have on this sort of indication?

Speaker 4

Yes. Thanks for the question. We're very optimistic about the impact of AXS-twelve and we recognize that there will be some education around the mechanism and the product and what makes it unique relative to some of the generic SNRIs that have been used historically. But in terms of market opportunity, this is a very compelling market. Approximately one hundred and eighty five thousand patients suffering from narcolepsy, seventy percent of those suffer from cataplexy, and dissatisfaction, inadequate response with existing treatments is very, very high.

Speaker 4

So we see a real opportunity for ANXS12 in this marketplace and we'll share some more details on our thinking on the approach that we'll take as we get a little bit closer to the filing.

Operator

The next question comes from the line of Myles Winter with William Blair. Please proceed with your question.

Speaker 17

Hi. Thanks for taking the question. Maybe one for Nick. Is there any material impact of the Medicare Part D restructure that took effect Jan one on Avelity revenues. And I'm also wondering what the mix is of patients that are getting access to Avelity through the Medicare system versus commercial payment and if that ratio is going to change over the next few years?

Speaker 6

Sure, sure, Miles. As it relates

Speaker 3

to Part D, we don't expect a significant impact. There might be just a little bit of a change in how GTN evolves throughout the year, but overall, we don't anticipate an impact at this point.

Speaker 4

Yes. And related to the mix, so currently Avelity is roughly 15% Medicare. Our TRx volume is 15%. We don't expect any significant changes to that. Obviously, with the potential for AXS-five and Alzheimer's disease agitation, there will be a much heavier focus on Medicare for that product, that indication.

Speaker 4

And so we'll have to share some more as we finalize our plans around NDIS and DA.

Speaker 6

Cool. Thanks.

Operator

Our final question is from the line of Joel Beatty with Baird.

Speaker 11

This is Chris Chen on for Joel. Just a question on AX05, not in ADA, but in smoking cessation. Just wondering if you could add a little more color on maybe a potential time line in 2025? And then just more specifically, are you incorporating the differences any differences between users of traditional cigarettes versus e cigarettes? Thank you.

Speaker 2

Thanks for the question. So we're right now where we are in terms of the plans for the Phase three trial, we're very confident that this study will start this year. So we're looking forward to sharing with you more of the details of the study design. The initial trial will look at patients who smoke cigarettes. And in terms of your patients to use other forms of nicotine, that will come at a later date, but for our registration trial it will be in smokers.

Operator

Thank you. At this time there are no additional questions and

Speaker 6

I'll hand

Operator

the floor back to management for closing remarks.

Speaker 2

Thank you for taking the time to join today's call. 2024 was a busy year for the company with the continued success across all aspects of our portfolio. As we sit here today on February 18, our business reflects an expanding commercial enterprise and rapidly advancing late stage neuroscience pipeline poised to deliver potentially five innovative products in 10 serious neuropsychiatry conditions that collectively impact the lives of more than one hundred and fifty million people in The U. S. Alone.

Speaker 2

We look forward to updating you on our continued progress throughout the year. Thank you and have a great rest of your day.

Operator

This will conclude today's conference. You may disconnect your lines at this time. Thank you for your participation.

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Earnings Conference Call
Axsome Therapeutics Q4 2024
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