Axsome Therapeutics, Inc. (AXSM) September 2026 Conference Transcript

Okay, we'll go ahead and get started with the next one. I'm Ben Burnett, biotech analyst at Wells Fargo. Pleased to be here with the Axome management team. We have Nick Pizzi, CFO, and then to his right, we have Marc Jacobson, COO. Thank you all.

Thanks for having us. Great to be here.

I think just to kick it off, maybe we could just start by, if you just give us kind of a quick overview of Axome and just kind of frame any near-term catalyst that we should focus on.

Sure, I'd be happy to, and maybe I'll start and then hand it over to Nick. But, you know, Axome, CNS-focused, Biopharma, we have three products that are commercial products. Those are Ovelity for major depressive disorder and agitation associated with Alzheimer's disease. There's Simbravo for migraine and Senosi for excessive daytime sleepiness and obstructive sleep apnea and narcolepsy. All products are growing robustly. Nick can share some of those numbers. And, of course, for Ovelity, we have recently expanded that team. So we're seeing robust growth beginning in major depressive disorder, or I should say continuing. And then the launch effort around the newest indication, Alzheimer's disease agitation, is underway. And so both of those efforts have started to come online this summer. We can get into the details. But that's the commercial business. So the company is, the foundation and growth is better than it's ever been. and we're very excited about the opportunity moving forward for the on-market products. And behind those, we have a very late stage and deep pipeline. We can cover those, but very quickly that covers a number of indications and states of development. We have AXS-12 for narcolepsy. That is under NDA review with the FDA. We have a PDUFA date of May 1st. And then multiple phase three trials underway in indications from binge eating disorder, ADHD, smoking cessation. So a lot of additional ways to deliver value to patients with potential label expansion efforts for the products that are on market now and new entrants. So we're happy to cover those. But the pipeline is also more robust and late stage than it's ever been. So the foundation is great, and we're really excited about where we are today, you know, about three-quarters of the way through the year. And I'll turn it to Nick in case you want to review some of the financials.

Yeah, sure. As Mark said, it's a unique and exciting time now at Axum. It's really like the next chapter of Axum's story. And I say that because we have the approval and the launch in ADA. And secondly, we've more than doubled the sales team for Avaldi. So super exciting about the back half of the year. We're seeing already impacts from both the expansion, significant impacts on the expansion, which we'll talk about a little bit more later on the NBRXs, and also as it relates to the indication and taking a look at subpopulations and seeing that dynamic growth that we have. So we're really pleased with that. and just from a financial perspective balance sheet we're in the best situation that we've been since really since inception of the company around right around 330 million as of the end of q2 takes us to cash flow positivity which we have shared in the past that being said we are also seeing in the pnl significant operating leverage in the back half of the year where we really feel we're setting ourselves up in the first half of the year with the sgna with the expansion. The P&L has already been impacted on where we expect to be for the back half of the year. So really plateauing out from an OPEX and seeing a nice growth on the top line. So seeing the operating leverage and eventually getting to profitability.

That's a fantastic overview. I want to start with Ovality and agitation. So it's obviously early days and you've been on the market only for a few months, but what's been the early kind of dog feedback there.

The early feedback is, you know, obviously it's very early, but we're very excited about the feedback we're getting, which is in line and matches the profile that we saw in the clinic and then the data that are on the label. So robust efficacy, it's working quickly, and the safety and tolerability profile is very compelling, especially in this patient population that is, you know, is considered a frail or at higher risk patient population. So that's great. It's still very early, and we want to, you know, the effort here and a key focus for us is driving trial and educating, ensuring we're educating potential prescribers about the product profile and then ensuring that if they're if they have a potentially appropriate patient that they were interested in trying the product in that they can do so and that can vary depending on the setting long term care or community setting we have a sampling program in place to facilitate that the majority of patients are coming have Medicare or and so that's a different type of you know there's there's no copay assistance program in place for those patients. So there are other ways to support potential trial primarily through sampling efforts.

And then quantitatively, what we're seeing with the launch is prior to launch, LTC Medicare 65 plus was less than 20% of our total MBRXs. Most recently, we're now north of 30% of our MBRXs is that specific subpopulation. So really seeing the growth there as it relates specifically for the indication.

Very cool. And actually, so I want to ask about the script data. And I think maybe this kind of feeds into sort of what you were just kind of mentioning there. I think a lot of us are, you know, there's a long history of script data because Obelity's been around for depression. And so we've kind of seen kind of that historical reference point. What are some of the considerations that we should have when we look at third-party script data?

So just in general, moving forward, with respect to AD agitation, folks tend to look at IQVIA and Symfony scripts, and both capture Alzheimer's disease agitation scripts. So we're not blocking scripts. Scripts are available. Sampling is not captured in scripts. So those are true samples. Sampling is not available in the long-term care setting. And so one area to look at, and this is both for long-term care and the community setting, is the titration pack.

So there are sample titration packs.

Again, those do not show up in weekly scripts. But then there is also trade titration packs where someone can just start a patient with a script on the titration pack. We'd expect that to increase in both the community setting once trial is underway through samples, but also as a reflection of long-term care uptake. And so we're just starting long-term care uptake. With respect to long-term care, the data providers project long-term care scripts differently. Unfortunately, Symfony, I believe, captures both new-to-brand scripts and total scripts or that it includes long-term care estimates in both of those segments, whereas I believe IQVIA, it's only capturing new-to-brand scripts, or I'm sorry, long-term care scripts in the total scripts, not new-to-brand. So those are some considerations. Any you would add to that?

Yeah, and I would just say, if your question was how should the street interpret the scripts and how do you gauge success, and one of the things that we looked at and we've always shared is NBRXs, NBRXs lead to the TRXs, so when you look at the evolution just this year alone in Q1 on average, through Symfony data, we were averaging around 2400 NBRXs per week. That number grew to 3,000 NBRXs in Q2, so roughly, what, 25%, 26% from Q2 to Q1. And Q3, we're seeing continued growth. And that most recent NBRX week was over 3,700. Last couple weeks have been on average around 3,700. So we are now starting to see that impact from the expansion. As we've shared, it takes typically three to six months from the time when you do an expansion to when you start seeing that impact. And we expanded the team, the community setting team in Q1 and Q2. So now is the time that we should see it, which we are. And even in, I would say, probably a more difficult month in the month of August, where typically things start to simmer down a little bit before September and October, but we're seeing that increase during that. So why is that important? The NBRXs will ultimately lead to the TRXs. So these NBRXs are filling essentially the pipeline that we will see in the TRXs in the months to come.

Okay, that's very helpful. And maybe just kind of one other question on this front. So in agitation, when someone gets a sample titration pack, how long does it take them to kind of go through that to where they may then convert onto a full script?

The titration, according to the label, is a three-week titration. And so the sample titration pack matches that. and so when that converts to a script we're monitoring that now because in a real world setting when someone fills a script that's more than just are they following the label titration it can be earlier, it can be later so we're monitoring to see what it nets out on average but the point is we've been sampling since this summer, since we launched the product in mid-June. And so we are seeing and we expect to continue to see conversion from those samples into scripts for the maintenance donors.

And just to maybe double back on what Mark's shared earlier, the demand that we are seeing for ADA is through the titration pack scripts as well as the samples that our reps are providing to the doctors. We haven't shared specifically the samples, the amount of samples, but those samples are robust. The majority of the demand is coming from samples. They are not reported in the script numbers. The titration pack prescriptions obviously are reported. And so we would anticipate that there will be eventually a transition from those samples to potentially the maintenance dose. They will likely not go on a titration pack script. they'll go directly to the maintenance dose.

That's fantastic. And I guess, I know it's, again, it's early days, but do you have a sense for kind of the phenotype of patient that is, you know, in agitation, that's taking ability? Are they often switch patients from Exalti?

It's very early, and it's very early, so we're watching that. We are seeing, though, frontline utilization, but, again, it's very early. So exactly how this evolves, we'll see. But what we are seeing, it's very exciting where, you know, it's rare these days where companies have the opportunity to provide, to really address an unmet need. And so now, you know, you have two companies doing that, and there are two products that are now labeled in AD agitation. There was wide and still is off-label prescribing for this indication due to the lack of approved medicines. And so now what we're seeing is just growth overall as opposed to, say, one eating another's lunch. We are seeing on-brand growth, which is great, but it's still so early to actually say, hey, the specific type of patient profile that we expect to continue or change, it's hard to say. But right now, we like the starts of the trends that we're seeing.

And if doctors want to write it first line, they have the ability to because we have the coverage. Every Medicare participant has availability coverage. and north of 85% of them have coverage with no PA and first line or potentially one step at it. So coverage is fully available for Part D patients if the HCP decides to write it.

Excellent. And you mentioned earlier about the long-term care facilities and kind of the growth you're seeing in that segment. I would assume that it's a pretty wide net and it's going to take some time to kind of get to all those touch points and sort of put that under the commercial umbrella. When do you expect to kind of be there in full force in selling to the long-term care facilities?

One of the main differences for these facilities, the jargon is that they're activated or you bring them online. So you're engaging with potential prescribers there, So the doctors who are seeing patients, diagnosing them, who may be prescribing, but you have additional stakeholders in long-term care that lead to ultimate prescribing. And oftentimes there are, depending on the type of facility, if it's a part of a network, those stakeholders include director of nursing, pharmacy, if the pharmacy is on site, or if it's part of a network that may be an umbrella over different facilities. So there are steps and activities that occur in that network of stakeholders to bring a facility online so that way a new product can be written within those facilities. Now, you can see certain kind of PRN or ad hoc writing here and there by certain prescribers in long-term care, but that's different from what you're talking about where you're really bringing long-term care facilities online so they can write for patients that have symptoms of agitation or now major depressive disorder in those facilities. And the reason I mention that, just to pause on that quickly, is we were not engaging with long-term care facilities at all prior to the approval of this new indication, AD agitation. And so now we can actually detail on both indications in long-term care. So we'd expect to see growth in a long-term care setting from both indications. And the process that I was talking about with different stakeholder engagement, getting the product or the different NDC codes or trade configurations into those systems. It takes about a minimum of one month on any given facility. So we're just now starting to see the impact. We touched on that with looking at the weekly scripts, the trade titration pack NDC code. That gives you a sense. And so it's just starting to come online, but really it's not going to be steady state or, you know, fully online for some time. And we're excited about the opportunity there. It's, you know, the product profile for sure, but then also how patients have been treated historically off-label antipsychotics. There are dynamics at play with respect to how these facilities are monitored. And then rated according to how many atypical antipsychotics they prescribe. And, you know, Avelity, of course, is not an atypical antipsychotic. So there are dynamics at play there and considerations for, from, say, a governance and buffering perspective that Avelity fits into nicely.

Great. And you said previously there's sort of peak sales guidance around this, our expectations, $4 billion apiece for MDD and agitation, which is great. I wonder if you can maybe articulate, what does that kind of apply in terms of market penetration in those two categories?

I think if you just take a look at where we are today in MDD specifically, right, we are 26 BIPs of the total antidepressant market. so that's 0.26 of 1%, and we're annualizing as of the end of Q2, somewhere around three-quarters of a billion dollars. So you can kind of do the math where if we just get to 1% of the antidepressant market, we're north of 3 billion already. So one of the leading indicators on where we are going right now, I share 0.26 in TRX, is we're 0.42, sorry for all the numbers, but we're 0.42 in NBRX is that's a leading indicator where the T's are eventually going to go and that point for two is continuing to grow as well. We're just like I said we're just starting to see the impact of the field force and as that continues to grow we'll see the N's and the T's continue to grow.

That's MDD, AD agitation obviously we've there's at this point in time since we've just launched the product there's effectively you know no penetration and so the it's a smaller patient population it's it's however you know the the there are fewer treatment options on on label so you you would expect potentially at steady state a higher penetration in in the market overall. But it's so early obviously we're we're we've just just barely scratched the surface there.

But as a reminder we have exclusivity into assuming we get pediatric indication through the end of Q1 2039. So that's another 12 years from essentially today, 12 and a half years.

Fantastic. And you've spoken about this before, but I want to get kind of the current thinking in terms of net pricing and gross net discounts on ability going forward.

Yeah. So we are in a better situation this year than we were last year. We started the year improved in Q1 as well as in Q2 compared to the prior year what we have shared is that we would anticipate similar trend that we saw last year which was continued improvement as the year progresses the Q2 we were approximately 50 percent and last year we were we were in the low to mid 50s and in the back half of the year we did see that improvement so we would continue to see further improvement in the back half of this year, the GTM.

Well, very good. I want to move to the pipeline, because you have some interesting readouts, including one coming up with the Engage study in Bidgenie Disorder. I guess, kick this off, what is the commercial opportunity there, and what do you need to show from an effect size to have kind of a commercially competitive product?

The opportunity, we think, is really compelling. There's one other approved product. That product, I think, was achieving around half a billion dollars in sales in that indication, approximately. And so you're right. So our program, the Engage trial, that's Solry Amphitol, and we've guided to top line in the fourth quarter of this year. And what we're looking for is a positive study. Given the dearth of approved treatments there, any new entrants, we think that's important. And so if we see a signal, we'd expect to need to run a second trial. And obviously, if the study's positive, that's something we would do. But we have a very good sense of the product profile overall now. So, you know, set aside potential impact to binge eating episodes. You know, that's obviously what we're looking for. We have a very good sense of the adverse reactions and the safety and tolerability of the profile of the product, which is approved. Obviously, we need to be looking for if there are any, you know, specific distinctions in this patient population, but generally we have the sense of that. We know the scheduling, you know, Schedule 4 for CENOSI, so it is, you know, there are limited barriers to prescribing or considerations given the scheduling, so that's good. We have other data that we've generated and, you know, published a few years ago now on CENOZI's impact to cognition. And so the, I'm mentioning that to give a sense of the overall product profile. And then that leads to the feedback we get from clinicians. You know, we're looking at four different indications. So there's binge eating disorder, ADHD, shift work disorder, and then major depressive disorder with symptoms of excessive daytime sleepiness. And what led us to launch all of those programs was feedback from prescribers and clinicians that the product has global changes, positive global impact to patients. And so we're conducting a very intentional effort based on mechanism of action and potential applicability to these indications to see if we can detect signal. And if we do, then that will lead us to conduct the next study in binge eating and go from there, and we'll have an answer soon.

That's great.

And actually, you mentioned shift work disorder, another program that's in the works. what is how big is that commercial opportunity I think there was a Pfizer drug that maybe I mean is that is that a good example of kind of what a branded drug can do in that category I think we shared three to five hundred million for ship work disorder from a peak sales perspective yeah the that study is underway and we've we've guided to top line next year and in this case binge eating disorder, we have a line with FDA that they want two studies, but for shift work disorder it is considered a related indication to the the currently approved indications. So this study, depending on what we see, could be NDA enabling or SNDA enabling.

Fantastic. And then I guess kind of a similar line of questions on ADHD. So you've now started another ADHD study. This is coming off of a prior study. I guess just based on the data you've generated to date and your expectations for the ongoing study, like how do you see this fitting within the kind of competitive armamentarium of ADHD drugs?

Sure. Based on the data we have in hand, and of course we need to complete the studies in in pediatrics and so in in children and adolescents which we started just a few months ago now and in our underway and enrolling which we're excited about the so I reviewed you know it's a nosey so it's sorry on fat all so I touched on some of just the general product profile attributes that are you know there are some specific differences between indications but are generally indication agnostic it's you know pertains to the molecule and its mechanism of action so that's relevant and distinct from from you know the stimulants and non-stimulants the we have one positive phase rate trial to date in adults and the absolute change we saw on on the rating scale in adults uh is is it was in line with with the So you have potentially an efficacy profile in line with the established kind of flagship products, but also a distinct safety and tolerability profile, you know, if the product is ultimately approved. So that's a really potentially compelling profile, which would be distinct, again, from the stimulants and non-stimulants if it's ultimately approved. And the market is very large, and there is a high need for new entrants due to tolerability issues. And in fact, the market is so large, there are regularly supply constraints at this time. So there is a need just in terms of overall volume demand for new entrants.

Absolutely, and actually if I can go back now to Availity AXS05 and it's the development you're doing in smoking cessation, what does that market look like and what are the, I guess what's the hypothesis there for testing this in smoking cessation?

The hypothesis, it's driven you know as all of our you know clinical experimentation it's generally driven been by mechanistic, through mechanistic rationale, and then some form of non-clinical or clinical data, or KOL or clinician feedback. And here we know that there are non-clinical and clinical data supporting NMDA receptor antagonism and sigma one agonism in this indication. We've been looking at this indication for quite a while, And, you know, we've been running air traffic control in the choreography of all of the programs that we have. And, you know, there are quite a few of them. And so we've just started this trial, the phase three trial, and it's a three-arm trial, AXS-05 versus placebo and also versus bupropion. And the market is, there are a few approved products, so there's Zyvan, there's Chantix, but other than that, there's been very, very little innovation in the space. And again, this is an indication we were interested in from very early on for this mechanism. And so now we're, you know, there is clinical data and, you know, from, that are available that are consistent with, you know, with running the experiment. And so we'll see.

And is this an indication where maybe one trial could suffice here?

Oh, we'd expect to need two studies. Okay. Yep.

And I also want to ask about the narcolepsy program. So AXS-12. We've seen Orzeifel, the first herbexin agonist, get approved. We're waiting for scheduling there, so it's not on the market. But I guess, how are you thinking about kind of the fit within the marketplace if this is ultimately approved in narcolepsy type 1?

Sure. It's an exciting time for narcolepsy where there are new entrants and other potential entrants. that are, you know, close to, you know, FDA action and AXS-12 is one of those. The profile that we saw clinically and, of course, exactly where it fits will depend on if it's ultimately approved and, you know, whatever the label looks like. But we have a sense of the product profile, and it's distinct from other products approved or product candidates in development. from each reference point. So mechanistically, it's distinct from the erexins and the oxabates. And as a result, from that mechanism, we see a very specific efficacy and tolerability profile. So we focused on cataplexy and so loss of muscle tone. We also, though, in the clinical studies, looked at excessive daytime sleepiness. So we saw improvements in excessive sleep, we saw improvements in cognition. And what ultimately ends up on a label, if it's approved, that's something we don't comment on during, while a review is underway. However, that just speaks to the efficacy profile overall and potential differentiation, and then from an adverse reactions perspective. If you look at, you know, you can look at it from, say, a scheduling perspective. And so we have that differentiation there. Or just rates of AEs, it's distinct. And so we saw, you know, a distinct tolerability profile, which then allows for, you know, specific patient profiling decisions or patient prescribing decisions. So we like that.

Yeah, I was just going to share that, you know, if the PDUFA dates May 1st of 2027, and if approved, we already have a sleep franchise, as a reminder, with Synose, so the infrastructure is already built, and an approval for AXS-12 is super synergistic to the organization, where we believe with, you know, orphan drug pricing, we haven't shared what the specific pricing would be, but it would be accretive very quickly.

Okay. And actually, it's a great point. I wanted to maybe drill into that and understanding that, you know, some of this is proprietary and around price and things like that. But when you look at the narcolepsy landscape, there are some branded drugs that command sort of high pricing. Is the goal ultimately to kind of help physicians think about combination therapy where they can add this to, because I think you mentioned the mechanism is very different, or the goal would be to price this in a way that this would be kind of a standalone?

We haven't offered commentary with respect to pricing. That's something we always wait for potential approval on. What I would say is your observation is correct. There's potential, it could potentially be used, especially depending on label. And it could potentially be used with other products, but that is not our primary focus. You know, we're, you know, again, given the overall profile. So the idea is not to necessarily have a product that's, you know, functionally adjunctive. But, you know, should there be a use case for that, you know, as determined by a prescriber, that, you know, I think that could be viable to, but not necessarily the North Star we're tracking to for that. Okay.

Maybe just the last minute or so, just capital allocation question. I think Nick, you gave some helpful comments at the beginning, but as you think about the phase threes that are coming up and the launch, how do you think about investing in the business going forward?

Yeah, our first focus in capital allocation is growth, top-line growth. And we think we're actually resourced really well for Availity. We invested in the team heavily in the first half of the year. We think, as I shared earlier in my introductory comments, is that we would anticipate the SG&A to essentially be plateaued to where we're at, potentially slightly increasing as the back half of the year goes. if we see certain ROI areas that we want to further invest in. But that's our main focus. From a BD standpoint, we've done BD historically over the last couple quarters in Q4 and Q1. We brought a couple assets in to add to our pipeline. And we'll continue to take a look if something arises that makes sense to Axelom. and then you know if we have additional resources we can we can take a look at other things that have have additional RI potentially stock repurchasing down the road so but we're that would be a fortuitous problem to have yeah awesome well just real quickly any any additional questions from the audience Thank you both.

Thanks for having us.

Appreciate it.