Axsome Therapeutics, Inc. (AXSM)·Q1 2024 Earnings Summary

Executive Summary

• Q1 2024 net product revenue was $75.0M (+160% y/y), driven by Auvelity sales of $53.4M (+240% y/y) and Sunosi revenue of $21.6M (+64% y/y). Total revenue was $75.0M; net loss was $(68.4)M, or $(1.44) per share, with $331.4M cash on hand .
• Auvelity demand and access improved: ~95,000 Rx (+12% q/q), ~18,000 new patients, and contracting with a second large GPO to expand commercial coverage beyond ~48% (overall coverage ~70%) .
• Pipeline catalysts: positive Phase 3 SYMPHONY for AXS-12 in narcolepsy; initiation of Phase 3 PARADIGM (MDD) and ENGAGE (BED) for solriamfetol (topline 2025); NDA plans for AXS-07 and AXS-14 targeted for 2Q 2024 .
• Seasonality and the Change Healthcare cyberattack pressured GTN and weekly scripts for a brief period; management reported quick recovery by mid-March and stable-to-growing trends thereafter .
• Stock-relevant narrative: accelerating Auvelity adoption (earlier-line use ~50%), GPO access expansion, and multiple late-stage readouts/submissions in 2H24/2025 are key catalysts for estimate revisions and sentiment .

What Went Well and What Went Wrong

What Went Well

• Strong topline growth: net product revenue +160% y/y; Auvelity +240% y/y to $53.4M; Sunosi +64% y/y to $21.6M .
• Access expansion: executed contract with a second large GPO enabling PBMs under the umbrella to adopt contracted terms; Auvelity remains ~70% covered across channels (~48% commercial, ~100% Medicare/Medicaid) .
• Pipeline momentum: AXS-12 Phase 3 met primary endpoint (cataplexy reduction) and improved EDS, cognition, and QoL; Phase 3 initiations in MDD and BED for solriamfetol; AXS-07 and AXS-14 NDAs targeted for 2Q 2024 .

Selected quotes:

• “Total net product revenue in the quarter was $75 million… We expect to continue the commercial and pipeline momentum in the balance of 2024.”
• “We believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan.”
• “We just contracted with a large group purchasing organization for a potential formulary of Auvelity…”

What Went Wrong

• Seasonal GTN pressure and cyberattack: Auvelity GTN in Q1 was low-to-mid 50s; Sunosi mid-50s; weekly scripts were down ~30–40% for ~2 weeks during the Change Healthcare incident before rebounding .
• Higher operating expenses: SG&A rose to $99.0M (+33% y/y) on sales force expansion and commercialization; R&D rose to $36.8M on multiple Phase 3 trials and NDA preparations .
• AD agitation timeline extended: ADVANCE-2 completion shifted from 1H 2024 (Q3 guidance) to 2H 2024 (Q4 & Q1 guidance), reflecting evolving treatment dynamics (brexpiprazole adoption) .

Financial Results

Segment revenue breakdown:

KPIs:

Note: CFO stated Q1 2024 net loss per share of $(1.40); the 8-K press release shows $(1.44). We anchor on 8-K as official and note the discrepancy .

Guidance Changes

Earnings Call Themes & Trends

Management Commentary

• CEO: “The first quarter was marked by strong financial performance for our on-market products… We expect to continue the commercial and pipeline momentum in the balance of 2024.”
• CFO: “Total product revenues were $75 million… Auvelity net product sales were $53.4 million… Sunosi net product revenue was $21.6 million… We ended the first quarter of 2024 with $331.4 million in cash.”
• Commercial lead: “Nearly 18,000 new patients started Auvelity in the quarter… we observed an inflection in weekly new patient starts in March… a positive signal…”
• CEO on AXS-12: “A third of the patients had a 100% reduction in cataplexy attack versus less than 10%… [and] clear impact on overall narcolepsy severity…”

Q&A Highlights

• Access and GPO pull-through: Management expects volume growth as PBMs under the new GPO adopt terms; timing uncertain but viewed as “meaningful” coverage expansion over 48% baseline .
• Demand composition and persistency: New-to-brand ~25–30% of weekly Auvelity scripts; anecdotal adherence roughly twice SSRIs per KOL feedback; inventory steady at ~2 weeks .
• AD agitation design: ACCORD-2 is a pivotal randomized-withdrawal study leveraging open-label responders; endpoints mirror ACCORD-1; FDA feedback supportive .
• ADHD program: Adult FOCUS Phase 3 topline 2H24; pediatric study planned (needed for filing); aim is to start pediatric study without waiting for adult readout .
• Cyberattack impact: ~30–40% weekly Rx impact for ~2 weeks; swift bounce back by mid-March after tech and savings optimizations .

Estimates Context

• S&P Global consensus was unavailable at the time of request due to a daily limit error; therefore, we cannot provide authoritative EPS/revenue comparisons vs Street for Q1 2024 at this time. Management did not provide sales guidance; they reiterated confidence in cash runway to cash flow positivity .
• Implications: Given y/y growth and access expansion, consensus models may adjust Auvelity trajectory and SG&A run-rate; watch for estimate revisions post GPO pull-through and AXS-12 data dissemination .

Key Takeaways for Investors

• Auvelity’s commercial flywheel is accelerating (earlier-line use ~50%, PCP penetration, new prescribers), with potential step-ups as GPO coverage pulls through; monitor PBM adoption cadence and GTN normalization into Q2 .
• Pipeline offers multiple near- and mid-term catalysts: ADVANCE-2 (2H24), ACCORD-2 enrollment mid-year, FOCUS (2H24), and NDA submissions for AXS-07/AXS-14 in 2Q24; the positive AXS-12 Phase 3 result strengthens the narcolepsy thesis .
• Expense profile is elevated due to commercialization and Phase 3 programs; track SG&A staying near ~$99M and R&D ramp for new trials, with one-time NDA filing costs in Q2 .
• GTN seasonality and transient cyberattack effects are subsiding; the March NBRx inflection suggests Q2 demand resilience—key for near-term trading setups .
• Access is the swing factor: two of three major GPO contracts are in place—coverage gains could unlock volume and influence GTN; timing uncertain but a major lever for Auvelity scripts .
• Balance sheet supports execution: $331.4M cash at quarter-end; management guides sufficient runway into cash flow positivity absent major plan changes .
• Watch for any clarification on EPS discrepancy (call $(1.40) vs 8-K $(1.44)); anchor on 8-K filings for financials .

Additional notes:

• Q1 2024 8-K press release (Item 2.02) and full earnings call transcript were read in full. No additional press releases were found between Jan–Mar 2024 beyond the earnings materials; several community/awareness press releases were issued in early June (outside Q1) .