Q3 2024 Earnings Summary
- Axsome Therapeutics has multiple late-stage clinical trials nearing completion, including AXS-05 for Alzheimer's disease agitation, with two positive pivotal trials completed and results from two more pivotal studies expected this quarter, which could support an NDA filing and expand the company's product portfolio.
- The company is expanding its sales force to approximately 300 representatives to capitalize on improved market access for Auvelity and prepare for future launches, indicating confidence in its commercial strategies and potential for increased revenue growth.
- Axsome is in a strong financial position, with cash sufficient to fund operations into cash flow positivity and execute on its priorities without additional financing needs, demonstrating financial stability and reducing dilution risk for shareholders.
- Increasing R&D and SG&A expenses due to sales force expansions and preparations for multiple product launches may impact profitability without specific guidance on cost management.
- Potential competition from new atypical antipsychotics entering the market may challenge Auvelity's market share, as these new treatments could provide better tolerability profiles and be preferred by patients and providers.
- Delays in clinical study timelines, such as the FOCUS study for solriamfetol in ADHD being pushed to Q1 2025, may postpone potential approvals and revenue generation, impacting growth projections.
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Cost Structure and Spending Outlook
Q: How will R&D and SG&A expenses evolve next year?
A: Management emphasized a rational approach to spending, focusing on return on invested capital. They are in the strongest capital position since inception and believe current cash is sufficient to fund operations into cash flow positivity. They expect a slight increase in R&D expenses in Q4 due to the PDUFA date for AXS-14, and SG&A expenses may slightly increase as they prepare for the migraine launch. -
Sales Force Expansion
Q: What is the plan for sales force expansion and its impact?
A: The company plans to expand the Auvelity psychiatry sales force to approximately 300 sales representatives by Q1 2025 to capitalize on improved market access and growth in primary care. They expect the expansion to increase reach and frequency, driving further growth. Additional expansion is planned for the migraine launch, with details to be shared later. -
Product Launches and Regulatory Updates
Q: What is the status of upcoming product launches and filings?
A: The NDA for AXS-07 for acute migraine treatment has a PDUFA date of January 31, 2025, with launch preparations underway. The NDA submission for AXS-14 for fibromyalgia is expected this month. For AXS-05 in Alzheimer's disease agitation, they plan to submit an NDA approximately 6 to 9 months after completing the ongoing studies, with results anticipated this quarter. -
Auvelity Usage and Market Access
Q: How is Auvelity being used and how is market access evolving?
A: Auvelity achieved approximately 144,000 prescriptions in Q3, representing 17% sequential growth and 108% year-over-year growth. Usage remains around 50% first or second line, with increasing monotherapy use. Market access has improved, now covering 63% of commercial lives and 78% of total lives. Primary care clinicians were the fastest-growing segment in Q3. -
Clinical Trial Readouts and Timelines
Q: When are the key clinical trial results expected?
A: Top-line results from the ADVANCE-2 and ACCORD-2 trials in Alzheimer's disease agitation are anticipated this quarter. Enrollment is complete in both trials, with patient populations similar to previous studies. The ENCORE trial for AXS-12 in narcolepsy has completed enrollment, with results expected this quarter. The FOCUS study in ADHD and the PARADIGM study in MDD are expected to report results in Q1 2025. -
Auvelity Gross-to-Net Expectations
Q: What are the expectations for Auvelity's gross-to-net in Q4 and 2025?
A: The gross-to-net for Auvelity was approximately 50% in Q3. They expect it to remain around 50% or slightly worsen in Q4, similar to the prior year. For 2025, they anticipate a negative seasonality impact in Q1 due to deductible resets, with improvement throughout the year.