Axsome Therapeutics, Inc. (AXSM) May 12, 2026 Conference Transcript

All right, everybody. Thanks for joining us for our next company presenter at the B of A Annual Health Care Conference. My name is Jason Gerber. I cover pharma and biotech at B of A. I'm pleased to be introducing Axome, our next company presenter. We've got Mark Jacobson, Chief Operating Officer, and Nick Pizzi, Chief Financial Officer. So, gentlemen, first off, thanks for joining us.

Good morning, everyone, and thanks for having us, Jason. It's good to be here. Obviously, a pretty exciting time for us, so it's nice to be able to chat with you.

So a lot going on. At Axome, recently, a high-profile new indication approval for Avelity, and a company has been, I guess, emboldened to convey even a more bullish outlook for the franchise and aggregate. Maybe we could start there, just if you can talk about the approval, what was the biggest positive takeaways in terms of product labeling, how that will confer competitiveness for Avelity, both in its newly indicated disease state as well as the legacy MDD indication.

Sure, we'd be happy to. And it's coming from a place of just what the current state of the business tells us as opposed to being, you know, feeling extra bold or bullish. It's just the state of the business, and we can talk about that. But to your point, starting with the label, this, you know, the label now for AD Agitation, it's incredibly clean and speaks to the underlying product profile, and that gives the team a lot of ability to educate potential prescribers for both indications. So that ties to the need in Alzheimer's disease agitation as a serious unmet medical need. It's dramatic that we can talk about the market size and the potential there, but there's also high synergy in overlap with MDD. And so maybe, Nick, do you want to start there?

Yeah, sure. It's 14 quarters into the launch. And as a reminder, we started the launch with 160 reps, So a very small amount of reps compared to our competitors, and that number has grown from 160 to 260, most recently 300. We just did the expansion from 300 to 630 in anticipation of the ADA approval, but also more importantly, just the trajectory that we've seen with MDD. We're really pleased with where we are. We're outperforming a lot of our competitors, you know, being only 14 quarters in. And I think the other piece of the puzzle is the payer access. Access for the MDD for Avaldi is already at 86%, of which 56% of that is either first line or first switch. So really pleased with where we are from a payer access perspective. And then the other thing that goes along with it is just the investment. We haven't invested heavily as of yet into DTC. DTC, we started that in Q4 of last year. We liked the returns that we had, but we did that with less than 300 reps on board. So we would expect to see a higher multiplier with the additional reps that we are bringing on with the investment that we're doing in DTC. So maybe just kind of summarizing it from a quantitative perspective, we are currently at 0.2% of the total antidepressant market, annualizing over $600 million. dollars. We're at 0.3% of the NBRX market. So NBRX obviously being a leading indicator where we expect to be from the T's, and that number is anticipated to grow as we further invest in the field force, as we further invest into the commercialization of the product.

And this idea of synergies and the benefit of ADA to MDD and MDD to ADA and just that virtuous a cycle of greater utilization, greater comfort, familiarity, et cetera. When we look to analogs in the CNS space that have, quote, unquote, done this indication stacking, right, and seen that benefit, it seems to me like a lot of those analogs were adding another mood disorder, right? But it was largely a psychiatry-driven sort of opportunity, like caploidal going from bipolar depression to unipolar depression, for example. Here, you're adding a new indication that probably has more complexities to it bigger primary care component maybe neurology component to it as well so uh can you unpack that are there different analogs you you look to um to derive comfort around this idea of synergy given that it could be somewhat different uh prescriber over or lack of prescriber overlap the um for analogs you know the the the ones you mentioned are are fine i i I don't know that we'd point you to any others as being our internal justification for where our modeling points us.

It's not that. You can actually just do the analysis on the prescribers themselves. And that's part of the team, our commercial team and sales operations of looking at your targets for each and looking at the overlap there. And can you detail or do you want to detail and try and educate those targets? So that is kind of the targeting analysis. So it's not predicated or based on another analog and how it did. But where do the synergies come from? So starting with long-term care, that's pretty straightforward, right? That is you have high rates of comorbid depression in individuals who have Alzheimer's disease agitation. But also just in long-term care, you have high rates of depression, right? 50% to 80% of individuals in long-term care facilities are depressed. And that's not an area that we've actively educated in the past or detailed in. And so we'll be doing that now. So you can very directly see that just educational efforts would be beneficial and synergistic in that area, right? If it's, say, one call or one medical presentation where you can talk about both indications, I think that's straightforward. And it's similar in a community-based setting where, you know, Nick talked about our investments in the sales force. We're going out further into primary care. And depending on where you are and you do these analyses, you know, urban centers, rural areas, in certain, you know, whatever geography you're in, you can do the analysis. says, hey, who are the targets? Is it primary care? Is it psychiatrists? Is it neurologists? And it turns out for both indications, the bulk of prescribers are primary care, and then psychiatrists, and then for Alzheimer's disease agitation, you do have some neurologists, geriatric neurologists, et cetera, but the bulk is primary care. And what we see and what we've seen since launch is when there is trial by an HCP and a certain number of trials in a certain period of time, that leads to adoption. And, you know, the expansion that we did last year, it was a small expansion in the sales team that allowed us to go a little bit further into primary care, and we saw those trends. And so now that we have this large expansion in the sales team and investment there, we expect to – that's where the bulk of our work will be, to go further into primary care, and that's where you actually see high synergy from a potential prescribing perspective.

Just to add to what Mark was saying, we did the expansion last year. We went from 260 to 300 reps. The idea there was to be more in primary care. And we saw a significant increase in NBRXs, you know, call it four to six months after we did that expansion in the beginning of the year, just with the 40 reps because we were able to get into primary care. But also, as importantly, we were able to have better depth with our individual HCPs. So if you think about our target list, when we started, it was really specialty.

It was really heavily on psych. and we are now just recently getting more heavily into primary care and as Mark mentioned as well we haven't even called on long-term care centers huge prevalence within long-term care centers in MDD obviously with ADA but also with MDD okay now the ADA market itself right there's there's certain generic antidepressants antipsychotics there's one branded antipsychotic approved what do you think is the critical differentiator for Avelity here is it more safety or efficacy you know when i look to mdd psychs always say drugs got to be super safe in mdd right it's just a critical table stakes almost right so when we think about ada is it

different um do you lead with more of of the efficacy benefits or or safety or is it a mix of both it's a mix of both and it's it probably starts with the mechanism right mechanistically it's highly differentiated and, you know, it's first in class. So it targets NMDA and Sigma-1. That's highly differentiated from on- and off-label pharmacotherapies that are used for these patients. And so then what does that lead to? You see differentiated or distinct efficacy and tolerability profile. the you know in the label we have parallel group advocacy data that shows the product works quickly and and separates very early on so so two to three weeks and then we have data that relapse prevention data so this is duration of effect and treatment effect over over longer periods of time and that's highly differentiated for for on and off label what's what's used now and And then the tolerability profile is great in terms of pairing with efficacy like that. So the tolerability profile, it's very clean, low rates of AEs. There's not a box warning for this patient population. We didn't see sedation. We don't see a mortality signal. We don't see a fall signal. The list goes on. If you look at the most common A's in the label for this patient population, it's dizziness and dyspepsia. That's it. So it's a very tolerable pharmacotherapy for the level of efficacy that you see with it. And so that's great. And then that also, just to further make the point about synergy, when you have trial and if the real-world experience matches the clinical data, And that's a very, very different option for patients and, you know, caregivers and prescribers than what's been available to date.

Okay. Maybe you have 600 sales individuals now that are going to be promoting both the ADA and MDD indication. How are these sales individuals going to be prioritizing? Is it the new indication gets more of the love versus, say, MDD, which is more established now at this point? or is it going to be very context-driven depending upon the provider and their practice and where the opportunity could be to drive business?

It's the latter. So it's context-driven. It's by target and by region and geography. So every account manager has a mix of targets who are primarily, quote-unquote, MDD target or an AD agitation target or they're both. And so that will drive their call plan, and so it varies. But every team member will have that mix of targets.

And it seems important to mention, so you'll launch in June, but you guys did a lot of the heavy lifting on the payer front in advance of this launch as you went through the regulatory review process. So maybe just level set for investors, what that coverage dynamic is going to look like day one, right, in this largely Medicare Part D population, both in terms of ease of access, quality of access, step-throughs, et cetera? Sure.

Yeah, so we would anticipate that every script for ADA, 80% of those scripts will be in Part D. In Part D, we currently have 100% covered lives in Part D, of which three-quarters of them, so 75% of them, will have no PA and first line or first switch. So we feel very good about coming out of the gate with coverage, specifically in ADA. And then the other 25% of the lives that are covered would have a PA, but we anticipate the majority of those that do have the PA would just be PA to indication. So it's not a heavily burdensome for the HCP to be able to write the product. And that would be also with basically first switch or potentially something after that. So overall, 100% covered lives. Typically, the next question is going to be related to GTN as it relates to Part D. We would anticipate that from a GTN perspective, that net price would slightly be better in Part D patients versus our commercial landscape. And that's really only due to there is no co-pay coverage allowed in Part D compared to commercial.

Next question is one, for lack of a better way of saying it, I'll call it plumbing in this market, right? Like where you've got an individual, they're Medicare, they're in a nursing home, they're in a long-term care facility. So they have this access. but like the facility that they're in the ability to write the script and seamlessly ensure that that that access is obtained and is that an awareness thing does your sales team need to work with practice or with these practices to understand how this all works and to have confidence that they can get seamless coverage maybe I'll talk a little bit about our LTC team so we of Of the 630 reps, there will be a portion of them that will be dedicated to long-term care.

And we look at those specific reps not as the typical specialty rep or primary rep. It's more of a key account manager. So to your point, Jason, there's a bit more work in hand-holding with some of these larger centers to educate them on what the payer access is to establish relationships with the pharmacies in and outside of the centers as well as with those HCPs that support the centers. They also may be in the community.

Yeah, I don't have much more to add to that except the plumbing. Maybe one way to say that is just that really ties to supply chain and the team has been preparing or the supply chain is already established through MDD to facilitate if a clinician or an HCP is writing their product, we want to make sure that script can be filled and that the product is there waiting when the script is filled. So that's behind the scenes or, quote-unquote, back office, but we've been attending to that, and we feel good about the infrastructure in place there.

Got it, and maybe just how would you frame the patient out-of-pocket cost dynamic for key subsets of this population, be it those with minimal out-of-pocket versus those that may have, and if you've got a blended average?

Yeah, sure. So a bit early on that, but what we have seen is as it relates to the patient population between non-low-income subsidy and LIS patients. So for those LIS patients that But their out-of-pocket, out-of-the-gate, or for each script would be something less than $13. On average, I think it's around $3 to $5, and I believe it's also voluntary. So for those patients, there shouldn't be much of a copay, if any at all. For the non-LIS patients, $2,100 is the max out-of-pocket for 2026, and they have the ability to cap and smooth. and that relates to any drug that they are taking so obviously if they are on an agitation med they're likely on probably a more expensive Alzheimer's med as well as other meds that they are currently taking related to their related to their health so overall they're we obviously can assist them from a copay perspective but you likely will see that seasonality until they actually hit their $2,100 out of pocket, and then that would improve as the year goes on.

And then for us in the analyst community, how would you envision tracking the launch?

Is that going to be something that will be discernible from the script data or on the quarterly updates, how you'll plan on educating us on the launch trajectory? so the the weekly scripts will be there the you know scripts that are written for patients with alzheimer's disease agitation those will manifest or or show up in weekly scripts and we will monitor that the the same way through weekly scripts and then we'll have additional data that that we can see through our our you know sales infrastructure or say retroactive claims data. One thing you can or folks can monitor or if you get scripts by channel, say Medicare Part D or commercial channel so folks can watch that. We'll see what we can offer for commentary and we'll look to do what we always do which is provide some level of detail or peel back the onion a little bit in terms of the quarterly dynamics we see. It could be potential prescribers it could be say number of detail or or it's hard to know because we'll have to see what what data we have but we'll we'll look to provide the same level of detail that that we have been but you know in the meantime from a weekly script perspective folks will have a sense of data through channel that that provides kind of a proxy for it but it's it's of course Medicare Part D is not exclusive to Alzheimer's disease agitation right if we're in long-term care and we're detailing on depression though that will also likely be um in and say that that channel however the point is what you'll be able to see is the overall performance of the brand and i think that's probably the most important yeah okay shifting

to mdd uh curious you know you're four years now i think into the launch so um you know where where you're winning share by by line of therapy and if you had to like deduce the ultimate success which would be hitting that four billion dollar target like you know one or two things right that you'd say this has to happen be it either this has to be adopted by primary care at a high clip or we've got to win the battle in early first second line like how would you frame if you could you know at a high level what has to happen to to get to that four billion target?

It's based on current trends and uptake. So obviously for MDD in particular, it's what we're seeing in primary care. It's what we're seeing with adoption. It's what we're seeing with how patients do and feedback from clinicians. And so we're investing further to go into primary care further as we talked about and if we see adoption there and at the rates at the pace the rates we see the persistence and compliance we see if if that if that holds up then then those are the numbers we'll we'll see and it's it's not predicated on you know threading some needle of some certain you know some patient profile it's it's where the the the coverage stands today which is which is great for just a few years after launch and where how we expect it to commute to grow and evolve over time its investments will make in the sales team and then the how productive we've seen that those efforts to date and to see you know to see that continue so it's it's not you know it's it's those numbers aren't it's not a Rube Goldberg contraption that that one thing has to one precarious event leading to another it's it's that's the product profile and and if you just step back nick touched on where we are with the overall market it's it's it's not even half a percent i guess it's it's barely half of a half of a percent right so it's it's the the market is so large the need is so large and if we do our job educating clinicians and the product profile continues to be what we've seen to date, that's the numbers that we'd expect.

Yeah, and we're 14 quarters in, right? We have exclusivity through early 2039 with pediatric indications, so 14 quarters in of 66 quarters who's counting, but that's less than 20% of our life currently, right? So we feel great about where we are, and analyzing a $600 million with a team that on average was somewhere in a neighborhood of 200 to 250 reps and mediocre market access up until really last year. We've been laying the roots in the foundation now for the three years with this approval, with the trajectory that we've seen. Now we're, I'm going to use the word in Vegas, I'm going to say we're going more all in now Because with the team and with the investment that we did in Q4 in DTC, we'll continue to add that investment. We don't anticipate that it's going to significantly increase from where we were in Q4. But we've laid that foundation now. We feel really great. And we've shared that it's an 8 billion plus number. It's not a max out at 8 billion, but it's an 8 billion plus.

Okay. It seems like DTC is basically table stakes, right, in the MDD setting. If you look at, like, AbbVie and companies that are operating in the space, they effectively use DTC. So curious your observations on ROI, and can you envision as you evolve to this profile if there should be step-ups in that investment from what you're seeing in terms of the ROI?

Yeah, we did DTC in Q4. We had a lot of learnings from that. And one of the learnings was where to place our ads between linear, which is the traditional over-the-air TV and digital TV. And, you know, we've learned where to place them, how to measure it, how to manage that spend. It's easy just to, some of our peers that are, you know, out there 24-7 and understand why they are doing that that's not how we spend and that's not how we've historically invested we've always gone with a very disciplined approach that made sense and we will continue to to invest in those areas I think we've we've gotten smarter we started the campaign again in March and we'll we'll have a campaign throughout the rest of this year but it will always be disciplined discreet regardless if you know where we are today versus in three years from now but I would agree we'll always have a presence out there in one way.

What Nick's talking about is to us that we're looking to make the most sound or best ROI decision. For us, the best ROI, it's the sales team. That's where we're investing heavily. We'll invest in other elements, which is traditionally described as surround sound. We'll have that, but it's being done. The track record for the brand to date, it speaks to that approach that you can drive very high performance with disciplined, say, commercial investments. We'll continue to do that, but you're right. As it grows, we'll change the mix of those investments over time.

Okay, so we've got about four minutes, so some quick hitters here, so I'll cut to the chase. Simbravo, the early efforts are on the access build side. when do you think investors should be looking to sort of like when you think an inflection can occur with Simbravo from a revenue recognition standpoint given where we're at and sort of the launch?

I think it comes with payer access and we announced that we had a nice win in Q1. So as access comes online, we expect to see an inflection with net sales. We had nice script growth quarter over quarter So, sequential script growth, I think, was around 36%. It's just, anecdotally, we've heard nothing but positive feedback as it relates to Simbravo. It works really well. Safety profile has been positive. So, we're pleased with where we're at. As a reminder, again, this was a similar playbook that we had with Avelity. We started with 160 reps in Avelity. We have, on average, roughly 100 reps for Simbravo. We did just announce the expansion because we feel great about that win as well as potential other wins that would be coming down the line.

Yeah, I'll just point out, I mean, this probably goes without saying, but it's a much different market from depression. So it's the launch, you know, Nick's is talking about our data-driven approach to investing, but the launch and how you navigate that market is much, much different from an access perspective and trial and treatment options. So we've always shared that we're starting discreetly so we can understand feedback from clinicians about the product profile, which Nick touched on, but then also maybe for plumbing or the inner workings of that marketplace. So we're wrapping our head around it, and now we're investing further. So we'd expect to see growth moving forward.

Synose, ADHD, can we just talk about the dream there, if you will, right? Like, is beating the non-stimulants from an efficacy perspective critical given the other inherent attributes of Synose relative to stimulants, right, in terms of scheduling and the safety profile considerations there? So it seems like you're kind of trying to offer something in between what non-stimulants are and what stimulants are. And so I'm just wondering how high the efficacy bar is.

Well, the efficacy that we saw in the adult trial to date is in line with one category of the products you mentioned, which is in line on an absolute change with the stimulants. So that's great. And then, you know, there's a distinct tolerability profile, which we think bodes really well for that patient population. Of course, we're running the experiments and we're starting the two trials in children and adolescents. So we'll have to wait for the data, but right now, you know, there's real-world experience, obviously, for the on-label indications. There's the clinical data in adults, and so we have a sense of the efficacy and tolerability profile. The scheduling's different. We see there are other data that we have in hand, right, that the cognitive benefit that we saw, we shared that through the SHARP study. That was a couple years ago now that was in individuals for the current on-label indications. But that, again, speaks to the differentiated product profile. So we've got to finish these two studies, and we'll be providing updates on them throughout the year. And then we'll turn the cards over and see what we have. But already we know the product is differentiated from what's available, which is great. and then, you know, providing different treatment options to clinicians and patients. That's our job. And then, you know, if the product is approved in the indication, then our next job will be to educate clinicians appropriately. But already it's a differentiated product profile, so we're excited about its potential. We just have to finish the clinical program.

All right, great. Well, we're out of time. So, gentlemen, thanks so much for joining us. Thanks for having us. Thanks, Jason. Have a good day.