Axsome Therapeutics, Inc. (AXSM) November 9, 2026 Conference Transcript

Perfect, okay.

All right, I think we're live now. Good morning, everyone. Welcome to Guggenheim Third Annual Healthcare Innovation Conference. My name is Jatin Suneja, one of the biotech analysts here at the firm. My pleasure to welcome our next presenting company, Axom, from the company. We have two executives here. We have Mark Jacobson, who is the Chief Operating Officer, and Nick Pizzi, who is the Chief Financial Officer. Gentlemen, why don't you make some opening comments, highlight some of the updates you provided at the quarter, both financial and pipeline, and then I've prepared a little bit of a Q&A that I want to run through.

Sure. Thanks for having us, Yatin. Good to be here, and good morning, everyone. Thanks, Yatin. So you're right. We last week reported Q3, and if you step back, Axom as a business now, we have three commercial products, four indications, one recent approval, and we'll get into that, of course, of L.A. for Alzheimer's disease agitation. The commercial business is growing robustly, and we're very excited about Aveli's performance in particular in both major depressive disorder and AD agitation and what's to come there. I'm sure that will be a focus to the discussion, so I'll pass the details for now. That is, of course, backed by Sanozi for excessive daytime sleepiness. That is growing very steadily. We're very pleased with the number of patients that's reaching and the state of affairs for that business. And then there's some Bravo, very pleased with that's our product for the acute treatment of migraine. Very, very strong. Clinician and prescriber and patient feedback. That's growing from a volume perspective, and our work there is to navigate the commercial dynamics that are in play and in place. We can talk about those, but we're very pleased with how that part of the business is growing. And then behind that, we have a very, very deep and robust and broad... We have a pipeline of innovative products that are 10 programs, and we can talk about those, but heavily weighted towards NDA stage or phase three stage programs, many of which already have one positive phase three trial behind them. And so those are all moving in the background. Of course, much of the focus outside the company is on the performance of Avality. But that part of the business is advancing very robustly and steadily. And 2027 could be a big year, or we expect it to be a big year in terms of potential milestones and catalysts for a number of programs. We'll touch on those. We have a PDUFA date for AXS-12. That's riboxetine. For cataplexy and narcolepsy, that is May 1st. So we're a bit over halfway through that review cycle, and that's moving forward as expected, and we can talk about opportunity there. So it's just an amazing time for the business and our history. So frankly, things have never been better from the perspective of the business. And I don't know if, Nick, you want to share? Sure.

Yeah. I'd love to talk a little bit about the financials. So revenue for the quarter was $260 million, surpassing on a run rate, annualized run rate, a billion dollars for the first time ever. So exciting time. So exciting milestone for Axlom. Aveli, our leading product, had $208 million in revenue for the quarter. That was 53% year-over-year growth. That accelerated from 51% year-over-year growth in Q2, sequentially growing 15%. That's led by continued growth in our MDD indication and accelerated growth in our new indication for Alzheimer's disease agitation. So pleased with where that is, and we can talk a little bit about how we're thinking about future growth for that product. And then with our second product, Cenose, Cenose did around $46 million for the quarter, and that was continued growth in that brand. And we did have a milestone. I've recognized in the quarter of roughly $8.5 million. And then finally for Symbravo, Symbravo grew, again, quarter over quarter, up to $3.9 million. And as Mark said, I've heard very positive things clinically and from a safety profile as it relates to Symbravo. So we expect continued future growth from there. Turning to the balance sheet, $314 million in cash. And this quarter, we were actually cash flow positive for the first time. Our net loss was $13 million, but if you take out our employee stock-based compensation expense, which was around $28 million, and take out other one-time things, we were about $5 million to $6 million profit from a cash flow perspective. So the balance sheet's looking great. The P&L continues to grow robustly, and as we shared, it's an exciting time right now at Axel.

Very good. Thank you for that overview. So let's just first focus on the ADA launch, because that's where I think investors are really focused on. I think you have said that it's tracking. You know, according to your internal plans, you have done like now full one quarter and you have now put one quarter under your belt. How should we think about the growth within ADA or the next, let's say, two to four quarters? Like what is driving it? How much there is? Because we don't have the exact numbers, but just articulate a little bit there.

Sure. I think the best way to look at future growth is based on the NBRXs. That is the leading indicator by far of how we anticipate growth for any indication. We've said that historically as well when we've done field force expansions, and we've seen that robust growth. So, a couple things to think about, specifically the ADA indication that you were asking, we did put a few slides to show, to break out the 65 and older cohort and 65 and under cohort, that's in our slide deck on our website, and you'll be able to see that, specifically in MBRXs, they have grown 3.6x within a very short period of time. So maybe just putting some more numbers to that, NBRXs per month were roughly 1,000 NBRXs from January of 2025 every month up until our approval. So 1,000 NBRXs per month. Upon the approval, even prior to starting to detail, you started seeing an increase. And as recently as the end of September, you saw that 1,000 number is now 3,600 NBRXs per month. So, taking that into consideration, they will ultimately lead into refills, and that's how you will get your TRX growth. And same goes for, I know this isn't specifically your question on ADA, but just in totality for Avelity, you see the NBRX growth every quarter by month. So it's basically 2,400 NBRXs per week. This is for the entire Avelity line, 2,400 NBRXs per week in Q1. It went to 3,000 in Q2. It went to 3,550 in Q3, and we're currently tracking at 3,800 NBRXs in October. So seeing that robust growth, that is not included yet in the TRX, right? So the TRX that you've seen, and we've talked about 14% TRX growth sequentially Q3 to Q2, the NBRX increase has not caught up yet into that TRX. So that is the future growth that we would anticipate. So we're really pleased with how not only the launch has gone, but the expansion has gone. And yes, is there things that we're going to continue to optimize and improve as it relates to the field team? We've more than doubled the team in a very short period of time. That's the work that's going on, that has gone on behind the scenes and continues to do so.

Got it. And how long it takes for the TRX to catch up to NBRX? And then also, I think there was another slide in your presentation about 65 plus NBRX. Just maybe talk a little bit about that.

Yeah, sure. The 65 plus NBRX is what I was sharing where it was 1,000 NBRXs per month up to 3,600 NBRXs as recently as the end of September. And then the TRXs, the refills, usually takes a couple quarters for it to start to catch up, but it accumulates. So think of it as a funnel. We were adding into that funnel at 2,400 MBRXs per week at the beginning of the year. Now it's more than 50% the speed, the velocity going into that funnel. So in the end, you'll see the TRXs coming out of that funnel continuing to pile on top of each other and build on top of each other.

Are you in the LTC channels right now?

The team is active in long-term care, yeah. So we have a dedicated group of the sales team that is active in long-term care, and we expect to see that work start to manifest in terms of prescribing in that channel, and we're starting to see that. So that's an area where we really expect to see robust growth into the end of this year and next year. It's just getting started, and we can talk about why that is. It tends to be, you know, it's not just visiting a prescriber, you know, doing a detailed, some educational touchpoint and maybe a repeat touchpoint. Here, there's activation of facilities. That means placement of the brand in their prescribing systems, education for directors of nursing or nursing staff, and then also education of the prescribers. Oftentimes, it's a community-based prescriber who's rotating or visiting a facility. So it's more complicated to get, quote-unquote, facility desactivated. So it's a longer time to prescribing, but then once you're good, then there is an anticipated steadiness to it. So we expect that to be one of the contributors to the continued build moving forward here.

Got it. And then in terms of the indicators or the leading indicators that you track, and let's say specifically for ADA, what are those outside of NBRX? What about sampling dynamic? Sure. You touched about that on the call.

Yeah, yeah. Oh, sure. So the NBRX, that's the best leading indicator, you know, I think for everyone because, you know, you can. You can track it, and if there are weekly scripts for us, what do we look at, there are different types of KPIs that you can use, samples, calls, rep-triggered emails, so there are a variety of metrics that the team looks at, and what I'll share is we typically don't provide numbers there because it's salesforce strategy and tactics, But everything, the metrics are all aligned and point to robust growth for AD agitation and also MDD.

Got it. So that's about ADA. I mean, you've also expanded the sales force, so that should also be helping with the MDD. Talk about that dynamic, you know, how much of the growth you're seeing in all these numbers that are going up on NBRX. Like, how much of that maybe is MDD-driven of these?

Yeah, sure. I would say, again, not to reiterate on the NBRX, but that's your leading performance indicator. So, maybe taking a step back, if you think about what we've... Added from an expansion, team expansion, we went from somewhere in the neighborhood of 270 reps to north of, or right around 650 reps, let's say, in a very short period of time, in roughly a six-month period. And with the majority of those reps, that expansion being complete in Q2. So let's say the average tenured rep from the expansion is roughly about five months in, five, six months in, somewhere in that vicinity, maybe even four to five months. You're starting to see that ROI from those reps, again, specifically in those NBRXs, having it grown by more than 50% within a two-quarter period. So with with all that, we're continuing, you know, we've added more than double the team. We've also added more than double the first line leaders. So there's been a lot of A lot of optimization that has had to occur over that last two quarters, but we feel like that's a transient investment that we've made. Why did we go so big so quickly? The idea was, A, we have this new indication, B, we have payer access for MDD as well as ADA that is at a, we'd say, very solid rate, meaning from a total covered lives, 89% total covered lives in MDD, 100% of all Medicare patients are covered with the vast majority, vast, vast majority having no PA, no step at it. So access is there. So we decided, hey, let's invest heavily now with the team. Rather, we did two other expansions previously over the last couple years. Every time you do an expansion, there's always going to be a disruption. So we decided, let's do it all now, bring in the team. We have a very long runway. We have through the end of 2038 into early 2039 with pediatric indication. And we had the ability, the balance sheet, to be able to do that investment now. So that was why we chose to more than double the team in a short period of time.

Got it. And what are you seeing in the primary care? I mean, that's where you're seeing penetration. I think the number is maybe 25-ish percent. How much more we can go?

Oh, yeah, we think a lot more. And so the primary care, it makes sense for both indications. And it lines up with where access is this year, also for both indications. And so, you know, we wanted to be mindful of when we started to really ramp up primary care engagement, because access needed to be a point where if we're seeing material writing in that area, you want the scripts to be filled. Got it. And so we're seeing that. Now, of course, that quote-unquote, you know, we know everyone is really, really... Watching how NBRX is translating, that, of course, is a longer translation from an engagement from a rep productivity perspective to a potential script being written and then a potential script being filled. And we can talk about why that is, but it's different from the historical rates we've seen. This is intentional because over the long term, that leads to very robust, durable, and sustained growth. And of course, we want to make sure the product is used or available to as many appropriate patients as possible, and you have a lot in a primary care setting.

Got it. How is the gross-to-net shaping out, and how should we think about pricing in 2027? There was improvement in Q3, but going forward, what's the expectation?

Yeah, it's a great question. In Q3, we did see improvement in the mid to high 40s. So if you think about that, we had the most covered lives in Q3 and the best GTN since launch. So really pleased with that. We've guided, as it relates to GTN into Q4, that there potentially could be a tick up. Just being cautious that we do have to accrue for the last two weeks of the quarter that would get adjudicated in Q1. So the last two weeks of the quarter that would be in channel that would get prescribed or adjudicated in Q1, which would first two weeks typically has the highest GTN in the entire year. And then for 2027, what we've shared is just take a look at quarter by quarter in 2026 and essentially copy-paste that into 2027 as a starting point right now. We think that a couple of things that would potentially change that is we'll see how MIX continues to grow in the Medicare channel. That is key. Then also, we continue, we have great amount of covered lives, 89%, but we're always looking to get to the best covered lives, preferred, unrestricted, no PA. So if we find ways that we can continue to further improve the quality of coverage, I think we have very good quality now. We'll always look to continue to further improve that quality. That also could put some pressure on the GTN. And so that's why we've shared at this point, take a look at GTN in 2026, and essentially, it'll look very similar by quarter in 2027.

Got it. Maybe final question on availability, then we move to pipeline. I think if you look at the second quarter and third quarter, I think the sequential growth has increased. I don't have the number right now, but I think it's somewhere between 23, 24 million on a sequential basis. I mean, is that sort of trajectory, because now ADA is helping you have more sales forward, is that trajectory going to hold? Or just curious about the trajectory of launch, of growth?

It was, yeah, 28 million. No worries. We haven't given specific guidance around that. We would expect continued momentum in the underlying MDD business and accelerated growth in ADA is probably best qualitatively that I can give you.

I mean, the guidance is up, but it, yeah, to Nick's point, we haven't shared what, you know, this is our methodology, right? We don't give quarterly guidance, but the, however, the quality of the guidance is continued robust growth.

Yeah, very good. Okay, so with regard to the couple of milestones that are coming up, the binge eating disorder study, I think you've narrowed it or to update it to Q1. What defines a win there? Do you need more studies? What is the path to NDA or SNDA?

Yeah, the win is if it's a positive study, you know, if we see a statistically significant result on the primary endpoint, and if the study is positive, we would need a second study. We've aligned with FDA that they'd like to see two adequate and well-controlled trials, and of course, the product is already approved, but the agency, the division, considers binge eating disorder to be sufficiently distinct from the two approvals that we need a standalone efficacy package, and we're in the midst of that, so we'll have an answer very soon. The Q1, that is the date because we have enrollments done, so now it's just, you know, the clock is ticking and winding down before we see top line, which we're excited about, and only one product approved. And we have a good sense already, of course, of the product profile, at least from a tolerability perspective. And then we know other elements of how it performs from an efficacy perspective and from a global changes perspective and clinician feedback there. So we'll see. And we're excited for that. We haven't had a clinical readout in some time, which is atypical for us, and we'll get back to that, and then that would be the start of potential clinical and poor pipeline milestones in 27.

Yeah, so maybe two more questions on Synossi. One is on the commercial dynamic. How should we think about the growth in the currently approved indication, and then, like you said, there are going to be a lot of milestones. When you have ADHD, MDD, shift work disorder, everything reading out in 2027 for Synossi, are there ones that are higher likelihood from a success standpoint?

Maybe a minute on the current indications. Continuing to grow, continuing to grow. Nicely quarter over quarter. That is with essentially a fixed investment on an OPEX side for the last several years. We have not increased the team. The team has been around 70 since we brought it over. We unlicensed it from Jazz back in 22 and continue to have the same sales team, continue to have a very similar marketing spend, and that the business has grown in low to mid single digits. It's consecutively, sequentially, you know, for quite some time. So really pleased to see how that's evolved. Peak sales in the current indications is $300 million to $500 million, and we're tracking very nicely to that.

Got it. From a development perspective, so we touched on binge eating, so that would be one of two. That's Q1. Then we shared with CLARITY, that's the trial in major depressive disorder, with individuals who have excessive daytime sleepiness. What we've guided to there, that's a randomized withdrawal trial, so that's event-driven in terms of when top line will occur, but we've guided to completion of enrollment next year, and so exactly when we'd see a readout to be determined, but that's moving along. We have, you know, we'll see what we see there, right? In psychiatry, placebo response rates have increased and continue to increase materially. So we'll see, especially in major depressive disorder, but we've designed a study that we think if the product is active, we have a chance of seeing a signal. Then behind that, you have ADHD, and there are two studies there in children and adolescents. In essence, we have the completed adult trial, which was positive, and we saw a very robust Treatment effect and, you know, with, you know, impact in line with stimulants and, say, a distinct... So that's what you want to see. Of course, that's a good setup, but we'll have to see how the product performs in the younger patient population. And then if we have those, that's what we need to proceed with a marketing application in ADHD. And then shift work, that's considered, or FDA considers that a related indication to the already approved indication. So there, we need one study. So if that study's positive, then that would allow us to file. Sinozi, again, it's been growing really well, and we really like the product and really excited about other potential appropriate patient populations that it could be a positive treatment option

Then a few questions on AX12, lipoxetine. Maybe a little bit early in the review process, but talk about if you can, how the review is going. But the key question I have is that what is your view on the market? Because when we did the diligence, I mean, it's been a while, maybe one or two years ago, there was a decent amount of excitement, but then the orexin came in. So what are you hearing from the market? Because you have an established sales force already. Yes. And it could be an orphan product.

Yeah, so, you know... Just a bit over, halfway through the review. That is tracking to where you'd want to be at this point in time. Nothing out of the ordinary. So we'll keep everyone posted there. PDUFA data, as we shared, is May 1st. So, you know, pre-launch activities are underway, and you're right, there's a lot of focus on the orexins now. ACEs-12 is distinct mechanistically, and also the efficacy and tolerability profile that we see, it's distinct. We think that's really important for this patient population where we know there are very discreet patient profiles, And especially tied to tolerability of agents that are currently available for those patients and others that are coming online. So we'll see how it goes, but as you touched on, we have a sleep team. And sleep infrastructure that's already in place and effective. The business is sound there, and we'll likely invest in driving any key differentials, say, from marketing, but the investments tend to be relatively, they're distinct and proportionally smaller than, say, for a larger team, so it is an orphan indication, And the infrastructure scales with that. And obviously, we have a lot to leverage already. So it's an exciting time there. And anything you'd add from the...

No, I just, yeah, as Yatna, as you alluded to, we have a sleep team. We could add it to the bag, minimal investment, accretive to the P&L pretty quickly.

Final question. You know, as you turn sort of cash flow positive, let's say you're profitable, you know, over the next 12 months, what are, how should we think about the, obviously, the revenues are growing. How the margins are going to evolve, where the leverage comes from.

I think first and foremost, it's to have sustained cash flow positivity. But even with that, though, is top-line growth. Our focus is top-line growth for the three brands that we currently have. That is our main priority. But as I shared, we were cash flow positive in Q3. We haven't shared that we're going to be sustained cash flow positive. We'll continue to take a look at additional investments that can further grow Topline.

Yeah, of course, that's a great place to be, to have the luxury of that decision-making, to, you know, how we're driving the business growth in the business, but then that behind it, everything is very healthy.

So very good gentlemen. Thank you so much.

Thanks, Yad. Thank you. Appreciate it. Good day.