Jefferies Global Healthcare Conference

We're going to get started with our next session. I'm Andrew Tsai, Senior Biotech Analyst at Jeffrey's. Thanks for joining me today. It's my pleasure to have the Axome team with me to my direct left, Mark Jacobson, COO, and to his left, Nick Pizzi, CFO. Welcome, both of you.

Thanks, Andrew. Thanks for having us.

Great. As usual, would you mind providing a brief overview of Axome, all the programs you're working on? Congratulations on a recent approval, by the way. but it'd be helpful to briefly talk about the programs and then milestones over the next six

to 12 months would be very helpful. Sure. Happy to do that. So Axolm is a CNS-focused biopharma. We have three commercial products approved for four different indications. That is Avelity, which is approved for major depressive disorder and most recently Alzheimer's disease agitation. We're very excited about that. We'll touch on that. There is Cenose, which is approved for excessive daytime sleepiness in narcolepsy or obstructive sleep apnea. And our third product is Simbravo for the acute treatment of migraine in adults. The pipeline behind that is very deep and broad. There are six product candidates that we are developing across 10 different indications that span different programs in psychiatry and neurology. So I'll try and do this very quickly. But the first and foremost on the commercial side, you know, the milestones and activities between now and the rest of the year, the launch of Avalide and Alzheimer's disease agitation that is on track for this month, we can get into that. We're very excited about that. And so then the balance of the year is really commercial performance and, you know, educating potential prescribers. Again, we'll get into that. We're very, very excited based on the state of affairs for Avalide to date. and launched to date in major depressive disorder, continued growth there, and then growth in Alzheimer's disease agitation, same for Sinozzi and Zimbravo. Turning towards the development pipeline with Avelity, the development code for that is AXS05. We think the product and product candidate, it targets NMDA and Sigma-1, And we think that's very interesting in a number of other neuropsychiatric indications where you're starting with smoking cessation. So we'll be starting a study in that indication soon. We said that would be for the second quarter. We're interested in other areas, too, and we'll share more about that as the year progresses. Then we have the name of Sanozia, Saurampatol, is the product name or the molecule. And we have four different indications that we're working on there that are all in active Phase III development. We have ADHD, so we have a positive study in adults that's been completed. And the action item for this year is to launch the two Phase III trials. One in each children and adolescents. That is on track for this quarter, so stay tuned. And then it's enrolling that program. And once those are done, then we'll, you know, if those read out positively, then we'll be filing a package there. There is major depressive disorder in individuals, patients with symptoms of excessive sleepiness. And so that's a precision approach to MDD. And that study is underway. So we'll continue enrolling there. There is shift work disorder. That study is underway. Top line next year. And then finally for this year, there's the binge eating disorder phase three trial, which we expect top line results later this year. That's all reamphatol. Then we have AXS12. That is our product candidate for narcolepsy, in particular cataplexy and narcolepsy. We've submitted an NDA to the FDA for that program. The next step there for this year is to announce the FDA's acceptance decision. AXS-14, we're conducting a Phase III trial on that program. For this year, it's continued enrollment and driving enrollment there. We already have two positive highly stat-sig trials for that indication, so we're excited about that study. And then we have two new product candidates, AXS-17 for epilepsy and AXS-20 for schizophrenia. And the work this year for those, it's trial-enabling work and tech transfer. So we'll pause so we can actually get into some questions here.

I appreciate it. I appreciate it. So I'd like to start with Ovality, of course. You recently raised the peak sales guidance, currently approved in depression and Alzheimer's agitation now. You raised the peak sales guidance to $8 billion, and you've mentioned that does account for IRA impacts potential. So for Availity, when could IRA impacts start to happen, and when do they get implemented?

Yeah, it would be 2031 or 2032.

Great. And then are you saying that you can grow through the IRA to get to $8 billion or are you hitting $8 billion before IRA happens?

We haven't given specific guidance on when we'd actually hit the $8 billion, but we've taken into consideration any type of IRA negotiations into that $8 billion.

And so if you're going to be doing $8 billion a year, you're raking in a lot of cash. What do you do with that cash?

It's a good problem to have, Andrew. Thank you. So I think the main focus on how we are deploying capital right now is heavily focused on just increasing growth, top line for our revenue. Coming out of the gate right now, we've already expanded our team for Avalide from somewhere in a neighborhood of $300 to $630. So our focus right now from a capital deployment is top-line growth, and we feel like our best ROI is with our sales reps.

Okay, right for now, yep. And then maybe just starting, actually, with some housekeeping questions, guided to do $4 billion, give or take, just for this indication alone. When I think about precedents of depression drugs, I guess Spravato, Vralar, Capilita, why do you think you can do more than those drugs in peak sales?

The data are just based on the current trends and uptake that we're seeing and how we're investing in the product. So already the run rate is about $600 million, And you can – we prefer not to tether too closely to other brands in terms of how we assess our own performance. But if you – given the question, if you look where the brand is currently pacing, it's doing very well with respect to some of the other programs in terms of attaining our guidance. So we'll just share that, but it's really just uptake and, you know, where we are now with weekly scripts, persistence and compliance, access coming online to an even fuller extent, number of covered lives, we can get into that and continue to evolution in the quality of coverage that's in place. And, but look, if you're going through the exercise, if you go back, you know, to the early aughts and look at other branded agents for MDD, right, in Avelity, it's for MDD, it's not adjunctive, right? And so given the – and if you were to bring those into today's, you know, current dollars and pricing frameworks, it's in line with those. And the market has grown since then. So it – and, you know, there are all different ways to look at it, and it's all consistent, right? You want to talk about penetration and just total – yeah.

Yeah, thanks, Mark. Mark, what we've been able to do with a very minimal investment compared to our peers is pretty significant, and that's why we're looking to double down now even further on our field force. But if you think about us annualizing three years in to north of $600 million with, on average, we probably had 225 reps. I think that's a small fraction compared to our peers, with minimal, if any, direct consumer advertising, meaning mass media, TV spend, and improving market access, originally coming out of the gate with very mediocre market access as a new entry to the space, but improving that to where it's at today, and that's more recently the second half of last year, we're at 86 percent covered lives 56 percent first line or first switch is meaningful and we're seeing the growth in market penetration we were as of the end of q1 roughly 22 bips only 22 bips of the entire antidepressant market that is an increase by I think north of 50 percent from where we were in q1 of 2025 so that is with the the team that we originally had prior to the expansion and you take a look at the NBRX is which is our leading indicator and that is roughly 50% higher that's around 30 to 32 bips of what our market share is so that'll be a nice leading indicator and I think one thing that kind of goes unnoticed here as well for additional growth driver is while we are well we did receive the approval in ADA this actually unlocks a a major subpopulation for depression in long-term care facilities we have not historically called on long-term care for any perception that we were detailing off labels so we kept that completely out of our target list this opens up that subpopulation where there is a significant prevalence of depression in LTC so that's going to be yet a further driver for MDD as we further expand the team.

Very helpful. And gross to net, I think it's been in the high 40s, mid 50s range right now. Within depression alone, is there more room for improvement on net price? Or are we there, basically?

No, it's actually a good carry forward from my last response. So as we are now entering an LTC, we may see more patients with depression that are on Medicare coverage versus commercial coverage, which because there's no copay specifically around in Medicare, that net price could be more favorable than what we've seen. So we started out of the gate in Q1 in the low 50s. That was an improvement from the year before where we were in the mid 50s. We would anticipate a similar trajectory in 2026 versus 2025. As a reminder, we ended Q4 2025 in the upper 40s. So I think we're pleased with where we are from a net price perspective, where we are from a total lives covered, as well as, as importantly, the formulary coverage.

Great, great. And so then shifting to Alzheimer's agitation, sounds like you're about to launch. Are we on track for this month?

Yep, we are on track. The steps to launching, the product is, of course, already available. So what we are doing is ensuring and completing our training process. And launch is really the initiation of detailing and educational efforts from the sales team. Obviously, the deployment, so to speak, of marketing materials, and that is on track.

And so let's just say you launch June. I guess the next update would be your Q2 EPS in August. During that time, what kind of metrics are you considering sharing with the streets?

So that is something that we are going to monitor to see what's helpful to share. But if you back up, when we report, we plan to report just total availability numbers. But we will look to be helpful for folks to show and speak to how the product is growing, uptake. So historically, we've shared information about number of prescribers, number of unique patients, and obviously coverage that will continue to evolve over time. So it will be in line with that, but exactly what we'll share is to be determined, and obviously it's a new indication, and then we're also going, as Nick mentioned, into long-term care. So we'll seek to be helpful, but I don't have exactly the KPIs in particular that we plan to share.

Okay. And bigger picture, fundamentally, there's you, there's Rex Salty, and that's it. And so remind us why you think you're a superior product to Rex Salty, why you think you can get way more traction. That'd be helpful.

Sure. So, I mean, there's us and Rexulti as approved agents, right? But there are over 20 million scripts written and well over 95% today are off-label. So they're, but on label, it's Rexultean and now Avelity. And, you know, I'll just talk about Avelity and its label and why we're excited about it. And so if you step back, the need is there, right? We talked about the number of off-label scripts, but the Avelity, we have data from different types of trials showing different types of efficacy. So a rapid separation versus placebo starting at week two and continuing there on. And so that's coming from the parallel group trial that we ran. But then on label, we also have a randomized withdrawal design study, which shows long-term durable efficacy, which is great. And so that's unique to Avelity, is that type of onset of action, so to speak, and then duration of treatment effect. And in fact, what's in the label and what we saw clinically is that if you take patients off the drug, they have a very, a much higher rate of relapsing than if they stay on the So that's very compelling, and that's specific to Avalid. Then we have the safety and tolerability profile, which is also specific to Avalid, which is very, very interesting. And both of these, of course, come from the molecule and targets at MDA and Sigma-1. But back to the tolerability profile, there's no box warning for this patient population. We saw a very, very clean safety profile, right? The most common adverse reactions were dizziness and dyspepsia. That's it. You know, you don't see classic AEs that you see with, you know, the majority of products that are used or have historically been used, say, sedation, mortality risk. And so it's a very, very clean tolerability profile, especially with the efficacy. And we're pretty excited about that in terms of delivering a new option to patients. And, you know, the need is so large, it's great that there are multiple options available for patients because there are different types of patients. And that's great. Now prescribers have an opportunity to tailor, to better tailor treatment needs to the patients that they're treating or overseeing.

And so your sales reps, 630 of them, they will be trying to market of LAD as the go-to first-line therapy? Is that the strategy?

It is certainly, you know, if you talk to KOLs, they see a first-line agent. That makes sense to us. And then access is in a place where kind of regardless of where it's written, scripts are generally going to be filled. The majority of scripts will be filled. And it makes sense. both in the community setting and in, you know, long-term care, nursing home, assisted living settings as well.

Yeah, and then so gross demand, MDD could improve due to long-term care. How about here for LAD and Alzheimer's agitation? Can gross demand improve as well?

We would believe that it would, specifically for ADA, since we think 80%, at least 80% of our patients will be in Medicare Part D. So we would anticipate a further improvement in GTN there.

Okay. And then, bottom line, you'll launch, looks like June, are you expecting the sales trajectory, the uptake to be stronger than what Rex Salty saw in their initial launch?

We haven't guided to that, and part of it is just exactly the early days. There's always volatility, right? And so the product's already been available for some time. So we'll see. I mean, we're incredibly excited, and the launch is, you know, the impact in the current, you know, NBRX is, we expect that to be, you know, substantial. But early days, that's always tricky, right? So we'll be going into long-term care for, it's tricky to tell you exactly how it's going to go, right, in the first weeks and, say, quarters. But overall, we can tell you how, you know, again, that it's going to be a substantial impact. But going into long-term care, that's much different from a community setting where, you know, you're engaging and educating clinicians who see some number of potentially appropriate patients with, you know, with some regularity on a weekly basis, depending on the type of prescriber. long-term care, there are different stakeholders that one would engage with and educate. And then their decisions tend to be, you know, algorithmic is the wrong phrase, but on a facility basis, decisions for products that are available within that facility tend to be made across a few stakeholders, pharmacy level, um, director of nursing, and then, uh, the, the prescribers as well. So it, and, and, and that bringing, um, um, facilities coming online, so to speak that, that can take longer. So, um, and, and so in the number you're bringing online at any point in time, that, that makes just telling you how the first few weeks they're going to go. It's, it's, I don't know how helpful that's going to be, but overall, we expect, obviously, due to the adjustment in peak sales, a substantial impact.

Yeah, I think coming out of the gate, you're going to have the LTCs, which is a completely new segment for us, and there's been work that's already been undertaken. And additionally, we've more than doubled the team. So you have a lot of new folks to the Axlom family and learning the product. and getting out there, either building new relationships or reconnecting from existing relationships. So it's going to, it will take some time, but we feel great about early signs. Unrelated to ADA, you know, with the expansion, we've seen a nice uptake already in NBRXs. Our NBRXs are up almost 20% over the last couple of weeks, surpassing over 30,000. I think we had 3,200 a couple of weeks ago, and we were tracking somewhere in the neighborhood of 2,700 per week. So it's, you know, just very early stages as it relates to the expansion for Velody. We've been pleased with what we've seen.

If you step back, you know, often, you know, conventional wisdom, which isn't always correct, but, you know, in our experience, it aligns with conventional wisdom that typically when you see an expansion, you start to see impact, meaningful impact, one to two quarters after the expansion has been complete. So that's if you just distill all of the specific levers and details we were talking about, we'd expect to see impact in the second half of the year.

And last question on this front is, I think what makes Ovelity special, which you've shown in MDD already, is the penetration into the PCP market. first line, second line, I mean, here Alzheimer's agitation, can you remind us what percentage of patients are treated by PCPs? And presumably that would be your marketing strategy on top of

long-term care. So if you start with first the split in community versus long-term care, the current trends or current script trends are about 60% in a community setting and about 40% in long-term care. And in primary care, I think it makes up about, you know, 35% of the scripts. And so you have primary care, you have psychiatrists and some neurologists, it depends, but you're right. The product right now is being used about a bit over 50% or half or are in, is monotherapy utilization, and I think it's about 56 percent or so is first or second line in MDD, and you're right, that's increasing because we've gone further out into primary care. So, you know, we expect that to, you know, those numbers to continue to increase, especially with AD agitation.

Yeah, and the setup plays nicely going into further into primary care with pair access now established and specifically around ADA that 75 percent will not require a PA primary care prefers not doing PAs they're not really necessarily set up to do PAs so recognizing that a PA will not be necessary to write or and to have that script filled is essential so the timing's working out nicely okay great

and so in the last five minutes maybe some like one-off questions across your program we'll see how far we get to but availability for smoking cessation starting phase three what's the rationale to do the study and what

drives your confidence when when we think about indications of interest we look for unmet need substantial unmet need you have that here met mechanistic relevance and then supporting data or data that would justify the additional experimentation. And we have all that here for smoking cessation, right? The large unmet need area that's been underserved and mechanistically there's relevance and And then there's good clinical and non-clinical and preclinical evidence for that. So we're starting that up. It's a program that we've been kind of chipping away at and thinking about for some time. And now with this approval ready to get it going, those gears are turning. And so we'll have more to say about study design and thoughts around potential timelines once we kick off the study.

that's coming up great and then moving on to another asset riboxetine which could be approved um i think like march april i don't basically first half 2027 time frame um shape of the curve for that drug in narcolepsy type one what do you expect the uh shape of the curve of just launch

Yeah, I mean, well, let's first see if the FDA accepts the submission for review, and so if they do, and if the product is subsequently approved, we're excited about this, right? So it's orphan indication, so you have, you know, it's not ultra-orphan, but it's orphan, so patients tend to be, you know, you're really talking about thousands of patients, And one thing that we really like about that program is it's highly synergistic with the sleep commercial infrastructure and team that is currently in place detailing Sanozi. And the products are also complementary or would be complementary if AXS-12 is approved. Sanozi, that is a wake-promoting agent. And for narcolepsy, it is only approved for excessive daytime sleepiness with AXS-12 that we're pursuing a cataplexy indication. So they're complementary in that fashion. And you want to talk about anything for the...

No, as you said, it's super synergistic. We already have a sleep team, and putting AXS-12 in the bag of the current infrastructure, really no additional operating expenses aside from maybe some minimal marketing expenses, so revenue falling essentially to the bottom line.

Yep, and then next is Synose for binge eating disorder. There's actually a phase three readout coming up in second half, 2026. So bottom line, is the bar for success what Vyvanse, which my understanding is approved, what that shows? Is that the kind of bar?

I mean, we, you know, I think for us, the products are already distinct and, you know, Sinozio is already available. And so we're looking for, you know, separation in a positive study. And then we would expect to need to run a second study, and then we'll go from there. But as you mentioned, there's one product approved. It's highly prevalent binge eating, and so additional options, we think that's a good thing. And then why we say, hey, we're looking for a positive study is the product profile is distinct. And so, you know, large indication, additional treatment options, so exactly how it fits or how, you know, potential use case to be determined. So, but we'll have an answer in the not-too-distant future.

And then last question is the same product, going after shift work data, phase three data set 2027. What drugs are, should we be looking at as a comparison, and can you file on one phase three?

The, you know, I think that you can probably guess we tend not to compare ourselves to other programs. But there, you know, other products that are used are, you know, modafinil, R-modafinil. And, again, we'd just be looking for a positive study. And, you know, the agent's weight promoting. And you are correct. In this case, we expect to only need one study, and that's based on feedback from the FDA because the division, the psychiatry division, considers it a related indication to the currently approved indications, which therefore can be used as supportive evidence. So if we've got a positive study there, then we'll be moving forward expediently with a potential submission.

Well, thanks for all the updates. I appreciate it. Good luck with the launch.

Thanks for having us, Andrew. Thanks, everyone. Thanks, everyone. Thank you, Andrew.