Axsome Therapeutics(AXSM) - 2024 Q2 - Quarterly Results

Executive Summary & Business Update Second Quarter 2024 Highlights Axsome Therapeutics reported robust Q2 2024 financial results, driven by strong Auvelity and Sunosi revenue growth, and advanced its pipeline with an NDA resubmission and anticipated Phase 3 trial readouts Q2 2024 Key Financial Highlights | Metric | 2Q 2024 (Millions) | YoY Growth | | :---------------------- | :----------------- | :--------- | | Total Net Product Revenue | $87.2 | 87% | | Auvelity Net Product Sales | $65.0 | 135% | | Sunosi Net Product Revenue | $22.1 | 16% | - NDA for AXS-07 in migraine resubmitted[1] - Topline results for ADVANCE-2 (AXS-05 in Alzheimer's disease agitation), ACCORD-2 (AXS-05 in Alzheimer's disease agitation), and FOCUS (solriamfetol in ADHD) are anticipated in 2H 2024[1] - NDA submission for AXS-14 in fibromyalgia is expected in 3Q 2024[1] CEO Commentary & Strategic Overview The CEO highlighted a robust quarter with strong Auvelity demand and expanded payer coverage, alongside significant pipeline progress including upcoming NDA submissions and pivotal trial readouts - Strong demand for Auvelity and increased commercial payer coverage by more than 22 million lives as of August 1st[2] - NDA for AXS-07 in migraine has been resubmitted, and AXS-14 NDA for fibromyalgia is tracking for 3Q 2024 submission[2] - Trials in four new indications for solriamfetol are underway, with topline results from the FOCUS Phase 3 trial in ADHD expected in 2H 2024[2] - AXS-05 program for Alzheimer's disease agitation (ADVANCE-2 and ACCORD-2 Phase 3 trials) is positioned to potentially report topline results for both in 2H 2024[2] Financial Performance Second Quarter 2024 Financial Results Axsome Therapeutics reported significant Q2 2024 revenue growth from product sales, but increased R&D and SG&A expenses led to a higher net loss compared to the prior year Revenue Performance Q2 2024 total net product revenue reached $87.2 million, an 87% YoY increase, primarily driven by 135% growth in Auvelity sales to $65.0 million and 16% growth in Sunosi revenue to $22.1 million Q2 2024 Revenue Performance | Metric | 2Q 2024 (Millions) | 2Q 2023 (Millions) | YoY Growth | | :---------------------- | :----------------- | :----------------- | :--------- | | Total Net Product Revenue | $87.2 | $46.7 | 87% | | Auvelity Net Product Sales | $65.0 | $27.6 | 135% | | Sunosi Net Product Revenue | $22.1 | $19.1 | 16% | - Sunosi Q2 2024 net product revenue consisted of $21.5 million in net product sales and $0.6 million in royalty revenue[3] Operating Expenses Q2 2024 R&D expenses significantly increased to $49.9 million due to new Phase 3 trials, while SG&A expenses rose to $103.6 million from commercialization and field force expansion Q2 2024 Operating Expenses | Metric (Millions) | 2Q 2024 | 2Q 2023 | Change | | :---------------- | :------ | :------ | :----- | | R&D Expenses | $49.9 | $20.6 | +$29.3 | | SG&A Expenses | $103.6 | $78.9 | +$24.7 | | Cost of Revenue | $8.1 | $4.6 | +$3.5 | - Increase in R&D expenses was primarily related to the initiation and continuation of solriamfetol Phase 3 trials, ongoing trials of AXS-05 and AXS-12, manufacturing costs for AXS-07 and AXS-14, post-marketing commitments, and higher personnel costs[4] - Increase in SG&A expenses was primarily related to commercialization expenses driven by field force expansion and higher personnel costs due to organizational growth[4] Net Loss and EPS Axsome reported a Q2 2024 net loss of $79.3 million, or $(1.67) per share, an increase from the prior year, reflecting higher operating expenses Q2 2024 Net Loss and EPS | Metric | 2Q 2024 (Millions) | 2Q 2023 (Millions) | | :----- | :----------------- | :----------------- | | Net Loss | $(79.3) | $(67.2) | | EPS | $(1.67) | $(1.54) | - The net loss in Q2 2024 includes $26.0 million in non-cash charges[5] Financial Position and Guidance Axsome's cash and cash equivalents decreased to $315.7 million by June 30, 2024, but the company projects sufficient cash to fund operations into cash flow positivity Cash and Cash Equivalents | Metric | June 30, 2024 (Millions) | Dec 31, 2023 (Millions) | Change (Millions) | | :----------------------- | :----------------------- | :---------------------- | :---------------- | | Cash and Cash Equivalents | $315.7 | $386.2 | $(70.5) | - Shares of common stock outstanding were 47,801,578 at June 30, 2024[5] - Axsome believes its current cash is sufficient to fund anticipated operations into cash flow positivity[6] Commercial Product Performance Auvelity Commercial Update Auvelity showed strong Q2 2024 commercial momentum with a significant sequential increase in prescriptions and expanded payer coverage, reaching approximately 76% total covered lives - Approximately 123,000 prescriptions were written for Auvelity in Q2 2024, representing a 29% sequential increase versus Q1 2024[7] - Commercial payer coverage for Auvelity increased from 48% to 60% of lives covered as of August 1st[7] - Total payer coverage for Auvelity across all channels is now approximately 76% of all covered lives[7] Sunosi Commercial Update Sunosi maintained steady Q2 2024 commercial performance with an 8% sequential increase in U.S. prescriptions and broad payer coverage across commercial and total channels - Approximately 45,000 prescriptions were written for Sunosi in the U.S. in Q2 2024, representing an 8% increase versus Q1 2024[8] - Sunosi maintains broad payer coverage in the commercial channel with 95% of lives covered[8] - Currently 83% of total lives across all channels are covered for Sunosi[8] Development Pipeline Progress AXS-05 Program Update AXS-05 is progressing in two Phase 3 trials for AD agitation, with topline results expected in 2H 2024, and a pivotal Phase 2/3 trial for smoking cessation planned for 2024 - AXS-05 is being developed for Alzheimer's disease (AD) agitation (FDA Breakthrough Therapy designation) and smoking cessation[11] - Topline results from the ADVANCE-2 Phase 3 trial in AD agitation are anticipated in 2H 2024[11] - The ACCORD-2 Phase 3 trial in AD agitation has met its enrollment target, with topline results also anticipated in 2H 2024[12] - Axsome plans to initiate a pivotal Phase 2/3 trial of AXS-05 in smoking cessation in 2024[12] AXS-07 Program Update The NDA for AXS-07 in acute migraine has been resubmitted for a six-month Class 2 review, with EMERGE Phase 3 trial topline results also expected in 2H 2024 - The NDA for AXS-07 for the acute treatment of migraine has been resubmitted and is expected to be designated as Class 2, subject to a six-month review[13] - Topline results from the EMERGE Phase 3 trial for acute migraine treatment in adults with prior inadequate response to an oral CGRP inhibitor are anticipated in 2H 2024[13] AXS-12 Program Update AXS-12, for narcolepsy (FDA Orphan Drug), is in a Phase 3 safety extension trial with Q4 2024 topline results expected, building on prior positive Phase 2 and 3 trial results - AXS-12 is being developed for the treatment of narcolepsy and has been granted FDA Orphan Drug designation[14] - Topline results from a Phase 3 open-label safety extension trial of AXS-12 are anticipated in Q4 2024[14] - AXS-12 previously met primary endpoints and demonstrated positive and statistically significant results in the completed SYMPHONY Phase 3 and CONCERT Phase 2 trials[14] AXS-14 Program Update Axsome expects to submit the NDA for AXS-14 in fibromyalgia in 3Q 2024, following previous positive and statistically significant results in Phase 2 and 3 trials - AXS-14 is being developed for the management of fibromyalgia[15] - The NDA submission for AXS-14 is expected in 3Q 2024, with pre-submission activities substantially complete[15] - AXS-14 has previously met primary endpoints and demonstrated positive and statistically significant results in a Phase 3 and a Phase 2 trial for fibromyalgia[15] Solriamfetol Program Update Solriamfetol is advancing in multiple Phase 3 trials for CNS disorders, with ADHD results expected in 2H 2024, MDD and BED in 2025, and shift work disorder results projected for 2026 - Solriamfetol is being developed for ADHD, major depressive disorder (MDD), binge eating disorder (BED), and excessive sleepiness associated with shift work disorder (SWD)[16] - Topline results from the FOCUS Phase 3 trial for ADHD in adults are anticipated in 2H 2024[16] - Topline results from the PARADIGM Phase 3 trial for MDD and the ENGAGE Phase 3 trial for BED are anticipated in 2025[16][17] - The SUSTAIN Phase 3 trial for SWD has been initiated, with topline results anticipated in 2026[17] Other Business Developments Sunosi Patent Litigation Resolution Axsome resolved patent litigation with Unichem Laboratories Ltd. for generic Sunosi, allowing sales from June 30, 2042, with potential for earlier entry or pediatric exclusivity extension - Axsome resolved patent litigation with Unichem Laboratories Ltd. regarding a generic equivalent of Sunosi in the United States[18] - The settlement permits Unichem to begin selling its generic version of Sunosi on June 30, 2042, or earlier under certain circumstances, and is subject to potential extension for pediatric exclusivity[18] Key Anticipated Milestones Axsome anticipates key milestones including an NDA submission in Q3 2024, multiple Phase 3 topline results in 2H 2024, 2025, and 2026, and a pivotal trial initiation in 2024 - Regulatory: NDA submission for AXS-14 in fibromyalgia (3Q 2024)[20] - Clinical Trial Topline Results (2H 2024): Phase 3 ADVANCE-2 (AXS-05 in AD agitation), Phase 3 ACCORD-2 (AXS-05 in AD agitation), Phase 3 open-label safety extension (AXS-12 in narcolepsy), Phase 3 FOCUS (solriamfetol in ADHD), Phase 3 EMERGE (AXS-07 in migraine)[20] - Clinical Trial Topline Results (2025): Phase 3 PARADIGM (solriamfetol in MDD), Phase 3 ENGAGE (solriamfetol in BED)[20] - Clinical Trial Topline Results (2026): Phase 3 SUSTAIN (solriamfetol in shift work disorder)[20] - Clinical Trial Initiations (2024): Pivotal Phase 2/3 trial of AXS-05 in smoking cessation[21] Corporate Information & Financial Statements About Axsome Therapeutics Axsome Therapeutics is a biopharmaceutical company developing innovative therapies for central nervous system (CNS) conditions with limited treatment options, aiming to improve patients' lives - Axsome Therapeutics is a biopharmaceutical company developing and delivering novel therapies for central nervous system (CNS) conditions that have limited treatment options[23] - The company is committed to developing products that meaningfully improve the lives of patients and provide new therapeutic options for physicians[23] Forward-Looking Statements This cautionary disclosure highlights forward-looking statements subject to risks and uncertainties, including commercial success, regulatory approvals, and economic conditions, which could cause actual results to differ materially - The press release contains "forward-looking statements" regarding future events or outcomes, identified by terms such as "anticipates," "expects," "plans," "will," etc[24] - These statements involve risks and uncertainties, including the commercial success of Sunosi and Auvelity, ability to maintain and expand payer coverage, success and timing of clinical trials, regulatory approval, intellectual property defense, capital requirements, and general economic conditions[24] - The factors discussed could cause actual results and developments to be materially different from those expressed or implied by such statements[24] Consolidated Financial Data Consolidated Balance Sheets Axsome's balance sheet shows total assets decreased to $548.2 million by June 30, 2024, due to reduced cash, while total liabilities increased and stockholders' equity decreased Selected Consolidated Balance Sheet Data (in thousands) | Metric | June 30, 2024 | Dec 31, 2023 | | :------------------------ | :------------ | :----------- | | Cash and cash equivalents | $315,657 | $386,193 | | Total current assets | $463,027 | $504,263 | | Total assets | $548,226 | $588,236 | | Total current liabilities | $186,570 | $138,854 | | Total liabilities | $445,374 | $397,259 | | Total stockholders' equity | $102,852 | $190,977 | - Accumulated deficit increased from $(835,571) thousand at December 31, 2023, to $(983,273) thousand at June 30, 2024[27] Consolidated Statements of Operations Q2 2024 total revenues increased to $87.2 million, but rising operating expenses of $165.2 million led to a net loss of $79.3 million, or $(1.67) per share, higher than Q2 2023 Selected Consolidated Statements of Operations Data (in thousands) - Three Months Ended June 30 | Metric | 2024 | 2023 | | :------------------------ | :------------ | :------------ | | Product sales, net | $86,520 | $46,017 | | Total revenues | $87,166 | $46,700 | | Cost of revenue | $8,055 | $4,599 | | Research and development | $49,853 | $20,581 | | Selling, general and administrative | $103,554 | $78,935 | | Total operating expenses | $165,212 | $111,757 | | Net loss | $(79,345) | $(67,170) | | Net loss per common share | $(1.67) | $(1.54) | Selected Consolidated Statements of Operations Data (in thousands) - Six Months Ended June 30 | Metric | 2024 | 2023 | | :------------------------ | :------------ | :------------ | | Product sales, net | $160,616 | $74,586 | | Total revenues | $162,165 | $141,276 | | Net loss | $(147,702) | $(78,388) | | Net loss per common share | $(3.11) | $(1.80) | Axsome Contacts This section provides contact information for Axsome Therapeutics' investor relations and media inquiries, including names, titles, addresses, phone numbers, and email addresses - Investors Contact: Mark Jacobson, Chief Operating Officer, Axsome Therapeutics, Inc., Tel: 212-332-3243, Email: mjacobson@axsome.com[29] - Media Contact: Darren Opland, Director, Corporate Communications, Axsome Therapeutics, Inc., Tel: 929-837-1065, Email: dopland@axsome.com[30]