Axsome Therapeutics(US:AXSM)2025-08-04 21:21PART I — FINANCIAL INFORMATION Item 1. Financial Statements The company reported $150.0 million in Q2 2025 revenues, a narrowed net loss of $48.0 million, and increased total assets to $639.8 million after refinancing debt with a new $570.0 million Blackstone loan Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $303,016 | $315,353 | | Accounts receivable, net | $198,825 | $142,001 | | Total current assets | $536,620 | $485,064 | | Total assets | $639,785 | $568,498 | | Liabilities & Equity | | | | Total current liabilities | $342,099 | $230,104 | | Loan payable, long-term | $117,540 | $180,710 | | Total liabilities | $566,710 | $511,483 | | Total stockholders' equity | $73,075 | $57,015 | Consolidated Statement of Operations Highlights (in thousands) | Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $150,042 | $87,166 | $271,505 | $162,165 | | Product sales, net | $148,959 | $86,520 | $269,317 | $160,616 | | Loss from operations | ($36,714) | ($78,046) | ($93,696) | ($145,321) | | Net loss | ($47,973) | ($79,345) | ($107,386) | ($147,702) | | Net loss per share | ($0.97) | ($1.67) | ($2.18) | ($3.11) | Consolidated Statement of Cash Flows Highlights (Six months ended June 30, in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($75,798) | ($83,577) | | Net cash used in investing activities | ($351) | ($150) | | Net cash provided by financing activities | $63,812 | $13,191 | | Net decrease in cash | ($12,337) | ($70,536) | - The company's product portfolio includes FDA-approved treatments Auvelity® (for major depressive disorder), Sunosi® (for narcolepsy/obstructive sleep apnea), and the newly approved Symbravo® (for migraine), which became commercially available in June 2025232425 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes improved financial performance to strong product sales and the Symbravo launch, with net loss decreasing to $48.0 million and liquidity enhanced by a new $570.0 million Blackstone loan facility Revenue by Product (in thousands) | Product | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | Auvelity | $119,642 | $65,025 | $215,873 | $118,420 | | Sunosi | $28,907 | $21,495 | $53,034 | $42,196 | | Symbravo | $410 | $0 | $410 | $0 | | Total Product Sales, net | $148,959 | $86,520 | $269,317 | $160,616 | - The increase in net product sales was primarily due to higher unit sales volume for both Auvelity and Sunosi, along with the commercial launch of Symbravo in June 2025199 - Selling, general and administrative (SG&A) expenses increased to $130.3 million in Q2 2025 from $103.6 million in Q2 2024, driven by higher commercial activities for Auvelity and Symbravo and increased personnel costs204 - In May 2025, the company entered into a new loan agreement with Blackstone for up to $570.0 million and used the initial proceeds to repay its existing debt with Hercules Capital, resulting in a one-time loss on debt extinguishment of $10.4 million109116235 - The company believes its current cash position is sufficient to fund anticipated operations into cash flow positivity based on its current operating plan223 Item 3. Quantitative and Qualitative Disclosure About Market Risk The company identifies interest rate fluctuations, foreign currency exchange, and inflation as principal market risks, none of which are currently expected to materially affect financial results - The company's principal market risks are limited to interest rate fluctuations, foreign currency exchange risk, and inflation242243245 - Management does not believe an immediate 100 basis point increase in interest rates or a 10% change in foreign currency exchange rates would have a material effect on the company's financial results or cash flows242244 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal controls over financial reporting during the quarter - The Principal Executive Officer and Principal Financial Officer concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by the report (June 30, 2025)246 - No changes in internal control over financial reporting occurred during the quarter that materially affected or are reasonably likely to materially affect internal controls247 PART II — OTHER INFORMATION Item 1. Legal Proceedings The company is involved in ongoing legal proceedings, including a securities class action related to Symbravo® and patent infringement litigation concerning Sunosi® against generic drug manufacturers - Securities Class Action: A lawsuit alleging false statements regarding the NDA for AXS-07 (Symbravo®) is proceeding against the company and two officers after a motion to dismiss was partially denied in March 2025251252 - Shareholder Derivative Action: A related derivative complaint against directors and officers is currently stayed pending the outcome of the Securities Class Action253 - Sunosi® Patent Litigation: The company has filed patent infringement lawsuits against several generic drug manufacturers that submitted ANDAs for Sunosi®. Settlements have been reached with Unichem, Hikma, and Hetero, while actions against other defendants remain pending254255 Item 1A. Risk Factors The company faces significant risks including a history of losses, the need for additional funding, dependence on product commercial success, regulatory uncertainties for pipeline candidates, competition, reliance on third parties, intellectual property challenges, and compliance with complex healthcare laws - Financial Risks: The company has a history of significant losses ($1.23 billion accumulated deficit as of June 30, 2025) and may never achieve profitability. It may need additional funding, and its debt agreement with Blackstone contains restrictive covenants261266269 - Commercial & Development Risks: The business is substantially dependent on the success of its three commercial products. There is no guarantee that pipeline candidates (like AXS-05 for AD agitation, AXS-12, AXS-14) will receive regulatory approval or be successfully commercialized. The company faces significant competition from major pharmaceutical companies285355356 - Third-Party & IP Risks: The company relies on third parties for manufacturing, clinical trials, and other essential services. It also faces risks related to protecting its patents, potential infringement lawsuits, and the fact that some key intellectual property is licensed from an entity owned by its CEO386393292 - Regulatory & Legal Risks: The company is subject to complex federal and state healthcare laws (e.g., Anti-Kickback, FCA), and failure to comply could result in substantial penalties. Changes in healthcare legislation, such as the Inflation Reduction Act (IRA), could adversely affect pricing and reimbursement430446448 Item 5. Other Information The company did not adopt or terminate any Rule 10b5-1 trading arrangements, though two executive officers adopted new plans in June 2025 for future stock option exercises - The company did not adopt or terminate any Rule 10b5-1 trading arrangements for itself during Q2 2025501 Executive Rule 10b5-1 Trading Plan Adoptions in Q2 2025 | Name | Title | Date of Adoption | Aggregate Shares to Be Sold | | :--- | :--- | :--- | :--- | | Herriot Tabuteau | Chief Executive Officer | June 13, 2025 | 524,000 | | Mark Jacobson | Chief Operating Officer | June 17, 2025 | 70,783 | Item 6. Exhibits This section lists key exhibits filed with the Quarterly Report on Form 10-Q, including the Blackstone loan agreement, the 2025 Long-Term Incentive Plan, and standard CEO/CFO certifications - Key exhibits filed include the Loan Agreement with Blackstone dated May 8, 2025, and the company's 2025 Long-Term Incentive Plan documents506