Axsome Therapeutics - Earnings Call - Q2 2025
August 4, 2025
Transcript
Speaker 9
Good morning and welcome to the Axsome Therapeutics second quarter 2025 financial results conference call. Currently, all participants are in a listen-only mode. Later will be a question and answer session, and instructions will be given at that time. Please note this call is being recorded. I will now turn the call over to Darren Opland, Director of Corporate Communications at Axsome Therapeutics. Please go ahead.
Speaker 8
Thank you and good morning, everyone. Thank you all for joining us for our second quarter 2025 earnings call. With me today are Dr. Herriot Tabuteau, our Chief Executive Officer, Nick Pizzie, our Chief Financial Officer, and Ari Maizel, our Chief Commercial Officer, who will begin our call with prepared remarks. Mark Jacobson, our Chief Operating Officer, and Hunter Murdock, our General Counsel, will join us for the Q&A portion of the call. This morning, we issued our earnings press release providing a business update and details of the company's financial results for the second quarter of 2025. I encourage everyone to visit the investors' page of our website to find our press release and the presentation related to today's call.
Before we begin, please note that today's discussion includes certain forward-looking statements regarding, among other things, the efficacy, safety, and intended utilization of our investigational agents, our clinical and non-clinical plans, our plans to present or report additional data, the anticipated conduct and the source of future clinical trials, regulatory plans, future research and development plans, commercial plans, and the possible intended use of cash and investments. These forward-looking statements are based on current information, assumptions, and expectations of future events that are subject to change and involve risks and uncertainties that may cause the actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports.
You are cautioned not to rely on these forward-looking statements, which are made only as of today's date, and the company disclaims any obligation to update such statements. I'll now turn the call over to Ari.
Speaker 5
Thank you, Darren, and thank you all for joining us this morning. Axsome Therapeutics delivered a strong second quarter, reflecting focused execution across our commercial business and development pipeline. Demand for our in-market products saw robust growth, and we continue to advance multiple late-stage development programs targeting several important neuroscience indications with significant unmet needs and substantial market opportunities. We delivered total revenue of $150 million for the quarter, representing substantial double-digit year-over-year and sequential growth driven by outperformance for both Auvelity and Sunosi. Nick and Ari will provide additional details on the accelerating dynamics for these important life-changing medicines. We are also excited to have recently launched Cimbravo, our third approved product and our second product that has been developed wholly in-house.
This launch represents a significant milestone for Axsome Therapeutics and for the millions of patients with migraine who desire new treatment options to manage the burdensome symptoms of this condition. Ari will comment on the early feedback on the product thus far. All in all, we are encouraged by the accelerating trajectory of our commercial portfolio. In parallel with the commercial progress, we continue to advance our innovative late-stage neuroscience pipeline. Last month, we hosted our Frontiers in Brain Health R&D Day with expert clinicians and key opinion leaders. The event showcased the breadth and depth of Axsome Therapeutics' potentially first-in-class or best-in-class pipeline, underscored the strengths of our clinical data, and highlighted our position at the forefront of neuroscience innovation. I will provide a brief update on the pipeline programs and upcoming milestones.
Starting with AXS-05 and Alzheimer's disease agitation, we are on track to submit the NDA for AXS-05 in Alzheimer's disease agitation this quarter. This is a key priority for the organization, and we look forward to keeping everyone updated on our progress for this program. We also continue to make progress on our development plans for AXS-05 for the treatment of smoking cessation for the Phase 2/3 trial expected to initiate in the fourth quarter of this year. Moving on to AXS-12, our novel product candidate for the treatment of narcolepsy with cataplexy. Progress continues in our NDA submission to the FDA, which is slated for the fourth quarter. In clinical trials to date, AXS-12 has demonstrated the potential to provide meaningful relief across multiple key symptoms of narcolepsy and to address a critical gap in care for this patient population.
For AXS-14 and fibromyalgia, we look forward to initiating a Phase 3 trial in the fourth quarter to address the FDA's feedback in the previously disclosed refusal to file letter. With more than 17 million people in the U.S. affected by this condition and with a paucity of approved treatments, we see a substantial opportunity for AXS-14 to transform the standard of care for these patients. Our Sollreinvital development programs continue to advance across four potentially high-value indications: ADHD, MDD with excessive daytime sleepiness, binge eating disorder, and shift work disorder. In ADHD, we previously reported Phase 3 efficacy results in adults, and we plan to initiate a Phase 3 trial in pediatric patients in the fourth quarter. In MDD with excessive daytime sleepiness, we are taking a precision medicine approach based on the clinical presentation and underlying pathophysiology of MDD.
This approach is supported by pilot data from our PARADYME study, and we expect to initiate a Phase 3 trial in this patient population in the fourth quarter. Our engaged Phase 3 trial of Sollreinvital in binge eating disorder continues to enroll and remains on track to read out next year. Binge eating disorder is the most common eating disorder, estimated to afflict over 7 million individuals in the U.S. With only one agent approved for this condition, it represents a high unmet medical need. The sustained Phase 3 trial of Sollreinvital in excessive sleepiness associated with shift work disorder is also progressing, with top-line results also slated for 2026. With three innovative CNS medicines now on the market and multiple late-stage programs advancing toward registration, we continue to build a strong, durable foundation for continued growth and significant long-term value creation.
With that, I'll hand the call over to Nick, who will provide details of our financial performance.
Speaker 2
Thank you, Ari, and good morning, everyone. Our second quarter performance highlights the growing momentum of Axsome Therapeutics' commercial portfolio and our continued execution in bringing important medicines to patients. Total product revenues for the quarter were $150 million, driving an increase of 72% year-over-year and an increase of 24% quarter-over-quarter. Auvelity continues to demonstrate impressive growth. Net product sales were $119.6 million, up 84% versus last year and up 24% versus the previous quarter. Sunosi net product revenues were $30 million, up 35% versus last year and up 19% versus the previous quarter. Sunosi revenues in the quarter consisted of $28.9 million in net product sales and $1.1 million in royalty revenue associated with Sunosi sales in out-licensed territories. Cimbravo was launched on June 10th and for this partial quarter generated net sales of $410,000.
Auvelity and Sunosi gross-to-net discounts for the second quarter were both in the mid-50% range. We continue to anticipate Auvelity and Sunosi gross-to-net trends will remain in this range for the remainder of the year. Cimbravo gross-to-net for the quarter was in the low 80% range. Turning now to expenses, total cost of revenue were $13.4 million compared to $8.1 million for the second quarter of 2024. Research and development expenses were $49.5 million for the second quarter compared to $49.9 million for the second quarter of 2024. The decrease was primarily related to the completion of Sollreinvital trials in ADHD and MDD, along with the completion of the AXS-05 trials in Alzheimer's disease agitation, which was partially offset by higher personnel costs. Selling, general, and administrative expenses were $130.3 million compared to $103.6 million for the second quarter of 2024.
The increase was primarily related to commercialization activities for Auvelity, including the expansion of the Auvelity sales force and expenses related to the commercial launch of Cimbravo. Net loss for the second quarter was $48 million, or $0.97 per share, compared to a net loss of $59.4 million, or $1.22 per share for the previous quarter, and $79.3 million, or $1.67 per share for the second quarter of 2024. The $48 million net loss for this quarter includes $24.6 million related to stock-based compensation expenses. We ended the second quarter with $303 million in cash and cash equivalents compared to $315.4 million at the end of 2024. We continue to believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan. With that, I'd like to now turn the call over to Ari, who will provide a commercial update.
Speaker 8
Thank you, Nick. The second quarter of 2025 marked Axsome Therapeutics' first with three marketed products, highlighted by the mid-June launch of Cimbravo into the acute migraine market and continued strong demand growth for Auvelity and Sunosi. Our commercial infrastructure, powered by Axsome Therapeutics' proprietary digital-centric commercialization model, supported robust business performance in Q2 and enabled rapid market entry for Cimbravo, with encouraging early signals of the product's potential. Starting with Auvelity, Auvelity delivered another strong quarter of growth, with increased new patient starts and continued expansion in prescriber engagement supported by our expanded sales force. Auvelity led the market in TRX growth, generating approximately 192,000 prescriptions in Q2, representing 15% quarter-over-quarter growth and 56% year-over-year growth. By comparison, the antidepressant market grew 2% sequentially and 1% compared to the second quarter of 2024.
Auvelity also led the market in new patient prescription growth, with nearly 30,000 new patients initiating Auvelity in the quarter, increasing the total number of patients treated with Auvelity since launch to nearly 220,000. A key growth driver in the quarter was the activation of approximately 4,800 new prescribers, with about half coming from the primary care setting, another positive index of product adoption. In addition to delivering strong prescription growth, Axsome Therapeutics made significant progress with market access for Auvelity in the quarter, with the addition of approximately 28 million new covered lives in the commercial channels starting July 1st. Auvelity coverage now stands at 83% of lives across all channels, including approximately 73% of commercial lives and 100% of government lives. Turning to Sunosi, total prescriptions in Q2 exceeded 50,000 for the first time, representing 9% sequential growth and approximately 13% growth versus Q2 of last year.
By comparison, the wake-promoting agent market grew 5.5% sequentially and increased by 5% compared to the second quarter of 2024. Payer coverage for Sunosi remains at approximately 83% of lives covered across channels. Finally, we are proud to have launched Cimbravo in mid-June, offering patients with migraine an important new and novel multi-mechanistic treatment option. While still early, just six weeks into launch, feedback from the migraine community has been very encouraging, with initial patient experiences validating the differentiated profile of Cimbravo as an effective, safe, and tolerable acute treatment for migraine. On the access front, we recently executed a commercial contract with one of the three largest group purchasing organizations, or GPOs, for potential formulary coverage of Cimbravo. Pharmacy benefit managers and health plans under this GPO are now able to make coverage decisions for Cimbravo based on the contracted terms.
Current coverage for Cimbravo is at approximately 38% of lives across all channels, including 26% of commercial lives. We anticipate coverage for Cimbravo to expand and evolve throughout the rest of the year. In closing, the second quarter reflected significant growth in Axsome Therapeutics' product portfolio, highlighted by solid performance from Auvelity and Sunosi, the recent launch of Cimbravo, and expansion of payer coverage to enhance patient access to our medicines. We expect continued strong commercial execution to drive momentum across the portfolio during the second half of the year. I will now turn the call back to Darren for Q&A.
Speaker 5
Thanks, Ari. We're ready to begin our Q&A now. We kindly ask that you limit yourselves to one question each so we can get through as many questions as possible. Thank you.
Speaker 9
Thank you. We'll now be conducting a question and answer session. If you'd like to be placed into the question queue, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. Once again, we ask that you please ask one question, then return to the queue so we get through as many questions as possible. Our first question today is coming from Lina Temeshev from RBC Capital Markets. Your line is now live.
Hey, thanks, guys. Thanks for taking my question. Congrats on the quarter. I wanted to ask a little bit more about the payer coverage expansion for Auvelity. I guess, first of all, given the large number of covered lives added, is this that third contracting organization? I guess it sounds like gross-to-net is not expected to change for the quarter despite all the new covered lives. I'm curious how you're thinking about the dynamics and how much volume we should expect to pull forward in the second half of the year. Thanks.
Speaker 0
Hey, Lina, thanks for the question. Regarding the coverage, this actually represents pull-through of previously announced GPO contracts. We were successful at engaging with the pharmacy benefits managers within those previously announced GPOs to secure access for the product. This is a really good signal of the strong work on our market access team. Obviously, we expect there to be some acceleration in volume, particularly related to these plans. In terms of overall impact, I think it's a little too soon to share exactly what the volume expectation or volume growth will be. I think it's fair to sort of look at last year's major access win as perhaps an analog for what to expect in terms of demand for the product.
Speaker 10
Yeah, as it relates to Auvelity GTN, we shared that we are in the mid-50s in Q2. We will see how these new $28 million lives are adjudicated. Utilization management will be significantly improved. The access to patients will be significantly improved. With that benefit, we're still able to maintain that mid-50s GTN for Auvelity.
Speaker 0
Thanks, really appreciate it.
Speaker 9
Thank you. Next question is coming from Sean Lomin from Morgan Stanley. Your line is now live.
Good morning. Hope everyone's well, and thank you for taking my question. I have a question on AXS-12. If you could just frame out a little bit the market positioning against Oxybates and the potential Erexin II agonists coming, and what data might be included in your NDA filing package? Thank you.
Speaker 0
Sure, yeah. I'll start with the question. First of all, we're really optimistic about the potential profile of AXS-12 in narcolepsy. As we've shared previously, over 90% of patients report discontinuing their medication due to inadequate efficacy or side effect profiles or recommendations from their HCPs to switch treatments. AXS-12 will be positioned as a rapid-acting narcolepsy treatment with significant reductions in cataplexy, improvements on areas such as excessive daytime sleepiness and cognitive function, which we observed in our three placebo-controlled efficacy trials. I think one of the things that we've learned a lot about is that oftentimes sleep specialists are looking at combinations of treatments based on the unique patient presentation and where they're seeing issues as it relates to symptomatology. It's a little early to tell exactly how AXS-12 will be used relative to other products, but you know it's once-daily dosing.
We are very optimistic that it will find a place in the treatment paradigm. As it relates to the Erexins, I think obviously a really great signal for patients and providers with the top-line results that were shared recently. There's not a ton of data shared, so we'll want to monitor their additional data that's released, particularly as it relates to the side effect profile. Even with the Erexins, we feel confident based on feedback with KOLs that AXS-12 will have a meaningful place in the treatment paradigm.
Thank you. Any data you're able to, or what kind of data might be shared in the NDA package?
Hi, Sean. The NDA package is going to be comprised of the three controlled trials that we conducted. That's the Concert, Symphony, and Encore trials. All of those studies will be going into the NDA submission, including the long-term safety extension.
Wonderful. Thank you.
Speaker 9
Thank you. Next question today is coming from Ami Faria from NewM Company. Your line is now live.
Hi, this is Poona on for Ami. Thank you for taking our question. On Cimbravo, could you provide some additional color on a sampling program? What has been the utilization of the drug through sampling, and any trends that you're seeing for conversion of patients from the sampling to the prescription drug? In terms of the launch, are you seeing any initial barriers to access or launch in general with Cimbravo, and what are the next steps in removing these barriers? Thank you.
Speaker 0
Yeah, thanks for the question. Regarding Cimbravo, we do have a sampling program alongside a patient savings program for eligible commercially insured patients. In the early days, we are seeing nice utilization of both those programs. It is very common for migraine patients to start with the sample in order to gauge effect of the treatment prior to filling a prescription. We've been encouraged by what we've seen thus far, which is samples being accompanied by a prescription and then strong utilization of our patient savings program for commercially insured patients. In terms of overall access, as we mentioned on our release, we have secured coverage for the product, although it's still very early in the launch, and we expect that to continue to expand and evolve over the course of the year.
We are seeing covered claims in the early days, which is a positive signal of the access that we do have. Providing support through our patient savings program is a good supplement to the existing access that's in the market today.
Great. Thank you.
Speaker 9
Thank you. Next question is coming from Jason Gerbery from Bank of America. Your line is now live.
Hey, guys. Thanks for taking my question. I guess mine's just on Cimbravo revenue recognition. My sense was that both 2Q and 3Q would be light with the copay card and the assumption that perhaps you wouldn't have the contracting up in place. With the update that you're at nearly 40%, I'm just wondering, will the new start script, I presume, flow through with better, better gross-to-net assumption? I'm just wondering if you can walk us through the next couple of quarters, just how to think about revenue recognition and the script data that we're seeing. Thanks.
Speaker 0
Thanks, Jason, for the question. Maybe I'll talk a little bit about RevRec specifically this quarter in Q2. Obviously, it was a very short quarter with just about two weeks. Wholesalers did place their minimal stocking orders, their initial stocking orders in June. Any of those orders were recognized as revenue along with the GTN that we shared within the, or that's around that 80% range. From that perspective, around the first scripts, Ari, do you want to share maybe a little bit about the NVRXs and how we're approaching them? Yeah, Jason, as you know, for early launches, nearly all of the prescriptions are new patient starts. In the migraine market, it's a little bit different than the depression market in that refill rates are not quite as substantial because these are episodic episodes of migraine.
They may be having anywhere from a few migraine attacks a month to up to a dozen or so. What we're monitoring is what the refill rate will develop over time. That said, we have started to see refills, but we expect that to be at a slightly lower velocity than what we've seen with Auvelity overall. In terms of the dynamics that you're referring to, we do have coverage today. We are seeing covered claims in the marketplace, and that means that not all patients are relying on our copay support in order to fill the script. It is still very early days, and that's something we'll continue to monitor. One other point that I'll make is that we are seeing scripts flow through from across all the channels: commercial, Medicare, Medicaid, and those dynamics will also evolve.
I think we'll have more to share on those dynamics as the year progresses.
Okay. Thank you, guys.
Speaker 9
Thank you. Next question is coming from Steve Stavropoulos from Canaccord Genuity. Your line is now live.
Speaker 3
Hi, good morning, and congrats on the execution, and thanks for taking my question. It's on AXS-05 in Alzheimer's agitation. You know, there's a clear mechanistic distinction and clinical profile for 05 versus antipsychotics. Rexulti's uptake has been relatively modest in Alzheimer's agitation. Given the differences in data and mechanisms, what are your expectations for adoption? Are you expecting it to mirror Rexulti, and how do you plan to drive uptake in the other various channels, if approved? Thank you.
Speaker 0
Yeah, thanks for the question, Steve. Obviously, we're following the Rexulti launch very closely, and we are seeing really nice demand, particularly in the Medicare channel. I think that that bodes well for AXS-05. One of the key elements that you highlighted, the difference in terms of MOA, but what we're hearing from healthcare providers across the Alzheimer market is that the combination of strong efficacy alongside a really great safety and tolerability profile is what sets AXS-05 apart from the currently used, whether it's off-label atypical antipsychotics or Rexulti. We feel really optimistic, if approved, that this will make a tremendous impact on the marketplace. In terms of raising awareness, there will be some benefit to our existing Auvelity sales force in the sense that there's a large overlap in MDD and EDS prescribing, particularly among psychiatrists and primary care clinicians.
We're also cognizant of the fact that we'll have to expand our promotional efforts to areas like geriatric psychiatry, neurodegenerative specialists, as well as long-term care facilities. That's something that we'll continue to work through as we prepare for a future launch. We feel really good about the potential for AXS-05 and the receptivity that it will have in the marketplace.
Speaker 3
Thank you.
Speaker 9
Thank you. Next question today is coming from Ashverma from UBS. Your line is now live.
Hi, thanks for taking your question. On Auvelity, I'm trying to understand if your GTN has stayed stable from 1Q to 2Q, then the 15% sequential growth that you have, what is driving the 24% net sales growth? Is that primarily in MDD, or is there any other factor that's contributing to that? Thanks.
Speaker 0
Sure. Yeah, thanks for the question, Nick. So GTN did slightly improve. We were in the mid-50% range for both quarters, but did improve within that range from Q1 to Q2. I would say secondly, as you spoke about inventory, inventory remains around that two-week mark. That being said, with higher demand, there's obviously an inventory impact of an increasing revenue for Q2 versus Q1, again maintaining at the Q2 two-week level. Tertiary, I would share that there is a small change of estimate from previous quarter as it relates to how we look at potential liabilities as of the end of Q1. We were favorable from that perspective. That also is included in the revenue. To be clear, there's no inventory impact at all as it relates to Auvelity, remains at that two-week level.
Oh, sorry. Can you clarify potential change of liability for the previous net sales number, or is that something else?
Sure. Yeah, I could share that. It's going to be in the queue, which we will file after the quarter, but it was less than $0.5 million. That's related to any type of rebates that we would owe that is in channel within those two weeks. We estimate that accrued as of the end of the quarter and then true it up the next quarter as typical as any company would.
Thank you.
Speaker 9
Thank you. Next question today is coming from Ram Sabaragu from H.C. Wainwright. Your line is now live.
Thanks so much for taking my question. With respect to Cimbravo, I was just wondering if you could give us some additional color on how you expect both gross-to-net trends as well as coverage percentages to trend over the course of the remainder of this year. If you could comment on any color from physicians as well as patients regarding what you see as the main differentiator for this product relative to the other migraine products on the market. In other words, is this the efficacy in those patients who have historically proven intractable to management with other anti-migraine drugs? Is it the onset of action or some other factor? Thank you.
Speaker 0
Yeah, hey, Ram, it's Nick again. I'll start with Cimbravo and then related to the GTN and then hand it over to Ari. As I mentioned, Cimbravo GTN was in that low 80% range for Q2. We expect it to remain high for the back half of the year. As Ari shared, you know, NBRX is out of the gate. We're making sure patients receive product. That would be likely a full buy down. As that proportion is still going to be high for the remaining part of the year, NBRX to TRX, we would expect GTN to also remain high. Sorry.
Speaker 10
Yeah, and related to some of the color from the clinicians and patients, I think first and foremost, the fact that Cimbravo offers a multi-mechanistic approach to acute migraine treatment is very compelling. Most other products are only focusing on one particular pathway. Cimbravo is focusing on two or more. Therefore, the idea of being able to attack the migraine attack in multiple ways is very compelling. I will say anecdotally, one of the things that we're hearing from early patient experience is the rapid onset of action and durability of response, which has come through loud and clear from folks who have tried it thus far. In terms of the patient types, what we're hearing early on is partial triptan responders, folks who are getting some relief but not feeling totally better or lacking in pain freedom is a key patient type that Cimbravo has been used for.
Also, patients that have had a good response to a triptan-NSAID combo but are looking for the utility of a single product to sort of minimize some of the pill burden. That is another area that we've heard very early on. I would just say that it is still very early in the launch. I anticipate that there will be additional patient types to break through. As we know, there's a ton of dissatisfaction amongst patients in this market. Despite the fact that there are multiple options available, there's still a lot of breakthrough symptoms or tolerability issues that really position Cimbravo as a great option.
Thank you.
Speaker 9
Thank you. Next question today is coming in from Mark Goodman from Leerink Partners. Your line is now live.
Ari, can you talk about your strategy for this precision medicine approach to ADHD? Does that carry over into the adolescents as well as the adults? How do you plan to move forward with this?
Speaker 3
Sure. Thanks for the question, Mark. The precision medicine approach that we refer to relates to Sollreinvital for major depressive disorder. We know that there are different patient types in depression, and this is a way of targeting the pathophysiology or one of the aspects of the pathophysiology of MDD, which relates to sleep quality. Some patients experience excessive sleepiness and others might experience insomnia. That's the precision medicine approach. It's based on looking at the clinical presentation as well as the underlying pathophysiology. As it relates to your question on the other part of your question on ADHD, we do know that there is a continuum of the disease from when patients have it as children into adulthood. We demonstrated efficacy in adult patients, and we think that that goes obviously really well for demonstrating efficacy in the pediatric population. That would be both children as well as adolescents.
Speaker 9
Thank you. Next question is coming from David Marek from Piper Sandler. Your line is now live.
Speaker 0
Thanks. On Auvelity and MDD, can you talk to the mix between second and third-line usage and even the extent to which you're getting flat-line usage? Also, with your comments on greater utilization among general practitioners, it sort of begs the question, do you think you need to expand the sales force to better target a broader audience of general practitioners? How are you thinking about that? Thank you.
Speaker 10
Yeah, thanks for the questions. Yeah, we saw continued stability in terms of early-line usage for Auvelity at approximately 50%. Really no change. It's sort of the second-third-line dynamic, and we're comfortable with that. I think we've shared previously that one of the benefits of Auvelity is that it has strong effectiveness regardless of prior treatment experience. That said, as access improves and utilization management evolves, we expect early-line usage to continue to grow, particularly as we're able to penetrate the primary care market. Yeah, we've seen nice growth in the primary care market. I think we're very comfortable with the size of our sales force right now. This quarter really underscored the impact of that sales force expansion earlier this year. We started seeing an inflection in new patient starts late Q1 that continued throughout Q2, which will impact the TRXs over the course of the year.
I think we're comfortable with where we are right now, and yeah, we'll continue to monitor the market dynamics to evaluate for the future.
Speaker 0
Thanks.
Speaker 9
Thank you. Next question today is coming from Serena Chen from Wells Fargo. Your line is now live.
Great. Thanks for taking my question. I had a question on AXS-05 for AD agitation. Just wanted to know when was the last time you heard from the current FDA administration that the data package for AD agitation is sufficient? Thank you.
Speaker 0
Hi, Serena. Good morning. We had announced a few earlier this spring, our pre-NDA meeting minutes where we aligned with the FDA on the submission. Since then, we've been completing the build of the submission, which is on track for this quarter.
Okay. Thanks.
Speaker 9
Thank you. Next question is coming from Andrew Sy from Jefferies. Your line is now live.
Hey, guys. This is John on for Andrew. Thanks for taking the question. If we fast forward in 9 to 12 months or so, how are you thinking about the commercial strategy for AXS-05 in terms of penetrating community centers or long-term care? Is there any low-hanging fruit from the very beginning? Also, thinking about if there was a potential ad-com, based on your prior FDA discussions, what would be the key talking points that the FDA would want to discuss in your view?
Speaker 10
I'll start with the commercial strategy question. It's a little early to share too many details, but obviously, we track the utilization of Alzheimer's disease agitation prescriptions across both outpatient and long-term care facilities. We have a really good idea of where the majority of these patients are being treated and which providers are most active in the space. Part of our commercial strategy will be to be really focused, like we've done with all of our products, and highly targeted on the highest SI or highest value prescribers within a particular space. I expect that that would be maintained for an ADA launch.
Speaker 0
With respect to a potential advisory committee, we've not received any indication that the FDA is looking to hold one. That's always something they notify you upon potential acceptance of a filing. As a reminder, there was not one held for Auvelity and MDD. The psychiatry division did hold one for the product Rexulti in the indication where they talked about a number of things, endpoints, the scale used, which is the same scale that we use, etc. It's really hard to speculate, but again, we're not aware of one at this time and haven't received communication of such. If there were one to occur, we'd be ready for it.
Great. Thank you so much.
Speaker 9
Thank you. Next question today is coming from June Lee from Truist Securities. Your line is now live.
Congrats on the quarter, and thanks for taking the question. This is Asim Rana on for June. Just on smoking cessation, so bupropion is already approved for smoking cessation. Are there any plans to conduct a head-to-head study of AXS-05 against Wellbutrin? Thank you.
Speaker 3
Thanks for the question. AXS-05 does combine two axes, and therefore, in order for the product to be approved, there does need to be demonstration of component contribution. By definition, a registration study would involve a bupropion arm.
Thank you. Can you just remind us when the sales force split across the three commercialized products?
Speaker 0
We have three distinct sales forces for each product. You have approximately 300 representatives on Auvelity and approximately 100 each for Sunosi and Cimbravo.
Speaker 9
Thank you. Our next question today is coming from Yatin Suneja from Guggenheim Partners. Your line is now live.
Hey, guys. Thank you for taking my questions. Very nice quarter. Just a question on Auvelity and the MDD dynamic. I mean, obviously, you have DTC ongoing. There is a sales force expansion. I'm just curious to understand from you, how should we think about the inflection that we should get, when exactly we should anticipate the inflection, and what level of step changes we should be expecting given these two dynamics? If you can also comment on the duration that you're seeing in the marketplace.
Speaker 0
I missed the last part.
Speaker 3
Duration.
Speaker 0
The last is on the duration. Yeah, last year duration.
Speaker 10
Okay. Thanks so much. Yeah. So in terms of Auvelity and MDD, obviously, we're very pleased with the performance so far this year. One correction I'll make is, you know, although we have not launched a national DTC campaign, we are expecting to later this year. That is not currently reflected in our demand trends. I just want to make sure you're aware of that. In terms of the inflection regarding sales force expansion, as I mentioned, we began to see an inflection in new patient starts towards the end of Q1 and that continued in Q2. Generally speaking, that is the sort of leading indicator for TRX demand growth or increase in trajectory. We'll be paying close attention to performance in the back half of the year. We would expect there to be continued growth progress over the course of the year.
Once we launch DTC, we expect that to be incremental growth to the current trends. In terms of giving you a specific estimate in terms of step change, I think it's a little too premature, particularly because we're announcing this access when starting in July. You can imagine that the totality of sales force expansion, improved access, and then DTC later this year will provide incremental growth rate for the brand. Oh, and in terms of duration, we're seeing somewhere around six, six, and seven prescriptions over the course of the year on average. Obviously, some patients respond well to the treatment and refill every month. Others that may have inadequate response or drop out of treatment based on achieving remission. On average, it's somewhere around six or seven.
Speaker 9
Thank you. Next question today is coming from Joseph Tomi from TD Cowen. Your line is now live.
Hi there. Good morning. Thank you for taking my question and congrats on the progress. Maybe on the pediatric ADHD study, can you go into a little bit more detail about what that trial will look like? It seemed like the presenting KOL at your analyst day had some opinions on that. Maybe go into a little bit more detail on a prior response. What specifically gives you confidence from the adult data we saw earlier this year that Sylvia Patel will be active in pediatric patients? Tangentially, this trial seems to have taken a little bit of time to get off the ground. I guess, how confident are you in that Q4 guidance? Is there anything specific about the pediatric population versus adults in terms of IRB timing or anything like that that makes this a little bit more challenging? Thank you.
Speaker 3
Great. Thanks for the question. As it relates to the pediatric study, we anticipated that would be a standard parallel group design. One of the differences between the adult and pediatric studies is a difference in the scale. We'd be using a pediatric scale as opposed to the adult study, which is an adult scale. In terms of what gives us confidence that the adult data will translate into the pediatric data, we're conducting clinical trials in order to test hypotheses. Nothing is guaranteed. If you look at other drugs for ADHD, which have been active in patients, they've been active in both adults as well as pediatric patients. Biologically, that would make sense since adult patients must have been diagnosed with ADHD as children. That's part of a diagnostic criteria.
As it relates to the timing of the start of the study, there is a layer of complexity when dealing with pediatric patients. We want to make sure that we have perfect alignment with the agency as it relates to the design of any trial in a pediatric population.
Speaker 9
Thank you. Next question is coming from Matthew Hirschenhorn from Oppenheimer. Your line is now live.
Oh, hey, guys. Thanks so much for taking the question. Ahead of the potential launch for AXS-12 next year, could you just talk about how you could leverage your current commercial capabilities in narcolepsy with Sunosi? How do you think about your overall strategy in narcolepsy with both Sunosi and AXS-12, especially as you think about competitive dynamics and polypharmacy? Really appreciate it.
Speaker 10
Yeah, thanks so much for the question. You know, there's near perfect overlap in terms of the targets for AXS-12 and Sunosi, and we'll be able to leverage our current Sunosi team fully for an AXS-12 launch. That's a real synergistic opportunity for us as a company. As it relates to positioning, as I mentioned in my earlier comments, we see a lot of polypharmacy in the space as clinicians seek to optimize treatment based on the unique symptomatology that patients present with. I think, in some ways, the fact that AXS-12 and Sunosi will have distinct indications, you may see some combination use. I think it's a little too soon to tell. Clinicians are going to want to sort of weigh in based on final label, etc. We feel very optimistic, and we've heard a lot of enthusiasm for the potential benefit of both products in patients.
Like the other treatments that exist, we expect there to be a whole variety of combinations used of the currently approved treatments.
Speaker 9
That's helpful. Thanks so much. Thank you. Next question is coming from Greg Suvenezes from Mizuho Securities. Your line is now live.
Hey, good morning. Thank you for taking my questions. Just across your three products that are now commercial stage, what should we expect with respect to summer seasonality as we think about third-quarter sales? Secondly, if I could ask, could you just remind us again your assumptions or expectations around the potential for IRA pricing, especially for Auvelity, and kind of what your current thinking is around timing of when Auvelity might be for such negotiations or discussions? Thanks.
Speaker 10
I'll start with the seasonality question. There is summer seasonality really across all three of the markets that we're currently in. I think in some ways, depression is perhaps the most pronounced. Obviously, we expect with Cimbravo, because it's early in launch, that you may not observe a true seasonality effect. The brand is growing from a relatively low base. There is some seasonality effect in the summer months across migraine, EDS, and depression.
Yeah, and then as for Auvelity, and you mentioned IRA pricing, it's presumably related to ADA. Again, ADA will be priced at the same WAC price as Auvelity. So it is Auvelity. It's only $1,177 at the current WAC price. As a reminder, I think we would be up for negotiation somewhere around 2029, 2030, with a potential implementation in the 2031, 2032 range.
Thank you.
Speaker 9
Thank you. Next question is coming from David Holm from Deutsche Bank. Your line is now live.
Hey, this is Sam on for David. Thanks for taking the question. On Sunosi, anything you all would highlight on what drove this strong quarter? Specifically, as it relates to the patient mix between narcolepsy and OSA, as a follow-on to a prior question on Auvelity, do you feel the need to further increase covered commercial lives from here? Thanks.
Speaker 10
Yeah, thanks, Sam, for the questions. Regarding Sunosi, nothing noteworthy regarding the mix of patients, narcolepsy versus OSA. We did see very strong growth in prescribers this quarter and active writers in the quarter. Not only did we have a higher number than previous quarter, but they were also more productive, meaning they were prescribing more Sunosi than in previous quarters. I think this really reinforces our strategy to drive depth of prescribing within the existing EDS marketplace for HCPs. I apologize.
For the commercial lives.
Yeah. On the commercial lives, obviously, we're very pleased with the announcement for today. You know, we're at 83% covered lives in total, and our goal is to get to as much of the insurance market as possible. We believe we still have work to do, and our expectation is that we continue to add additional coverage as time goes on.
Great. Thank you.
Speaker 9
Thank you. Our final question today is coming from Miles Mendorf from Blair. Your line is now live.
Hi, guys. Thanks for squeezing me in. Just one on Sunosi and ADHD and the comment to receive perfect alignment with the regulators. I'm curious as to why you think that a single trial in pediatric and adolescent population would be sufficient for potential approval here, as opposed to the guidance which keeps kind of bringing up that two positive pediatric studies, one of which could be done in adolescents, would be required for approval here. Just wondering whether you've received alignment with the agency based on that. Thanks very much.
Speaker 3
Sure. We will have more to say, but there are strategies to include both children as well as adolescents in one study. The reason for the guidance is to make sure that one can adequately determine what dose will be effective in both of those patient subpopulations. There are strategies to be able to do that in one study in conjunction with having demonstrated efficacy in the adult population. Age is a continuum. Stay tuned. Our goal, as always, has been to develop products in as streamlined a fashion as possible.
Thank you.
Speaker 9
Thank you. We reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.
Speaker 3
Thank you all for joining us today. As you've heard on today's call, Axsome Therapeutics delivered a strong second quarter marked by commercial growth, clinical advancement, and disciplined execution across the business. With a growing portfolio of innovative commercial and development neuroscience products, we are well-positioned to potentially address serious conditions that affect more than 150 million patients in the U.S. alone. We look forward to keeping you updated on our continued progress over the balance of the year. Thank you.
Speaker 9
Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.