Axsome Therapeutics, Inc. (AXSM) This fall 2023 Earnings Name Transcript

Axsome Therapeutics, Inc. (NASDAQ:AXSM) This fall 2023 Earnings Convention Name February 20, 2024 8:00 AM ET

Firm Contributors

Mark Jacobson – Chief Working Officer

Herriot Tabuteau – Chief Govt Officer

Nick Pizzie – Chief Monetary Officer

Ari Maizel – Govt Vice President and Head of Industrial

Hunter Murdock – Basic Counsel

Convention Name Contributors

Leonid Timashev – RBC Capital Markets

Charles Duncan – Cantor Fitzgerald

Ash Verma – UBS

Jason Gerberry – Financial institution of America

David Amsellem – Piper Sandler

Joseph Thome – TD Cowen

Marc Goodman – Leerink Companions

Graig Suvannavejh – Mizuho Securities

David Hoang – Citigroup

Myles Minter – William Blair

Eddie Hickman – Guggenheim Securities

Matthew Kaplan – Ladenburg Thalmann

Vikram Purohit – Morgan Stanley

Operator

Good day and welcome to the Axsome Therapeutics Fourth Quarter and Full-Yr 2023 Convention Name and Webcast. [Operator Instructions]. An issue-and-answer session will comply with the formal presentation. [Operator Instructions]. As a reminder, this convention is being recorded.

It is now my pleasure to show the decision over to Chief Working Officer, Mark Jacobson. Please go forward, sir.

Mark Jacobson

Good morning, and thanks all for becoming a member of us on at this time’s convention name. This morning, we issued our earnings press launch offering a company replace and particulars of the corporate’s monetary outcomes for the fourth quarter and full-year of 2023. The discharge crossed the wire a short while in the past and is out there on our web site at axsome.com.

Throughout at this time’s name, we will probably be making sure forward-looking statements. These statements might embody statements relating to, amongst different issues, the efficacy, security, and supposed utilization of our investigational brokers, our scientific and non-clinical plans, our plans to current or report extra information, the anticipated conduct, and the supply of future scientific trials, regulatory plans, future analysis and growth plans, our industrial plans relating to Sunosi, Auvelity, and our pipeline merchandise, income projections, and potential supposed use of money and investments.

These forward-looking statements are primarily based on present info, assumptions, and expectations which are topic to vary and contain dangers and uncertainties which will trigger precise outcomes to vary materially from these contained within the forward-looking statements. These and different dangers are described in our periodic filings made with the Securities and Trade Fee, together with our quarterly and annual reviews. You’re cautioned to not place undue reliance on these forward-looking statements, that are solely made as of at this time’s date, and the corporate disclaims any obligation to replace such statements.

Becoming a member of me on the decision at this time are Dr. Herriot Tabuteau, Chief Govt Officer; Nick Pizzie, Chief Monetary Officer; and Ari Maizel, Govt Vice President and Head of Industrial. Herriot will present an outline of the corporate and progress made within the fourth quarter of 2023, in addition to key upcoming milestones. Following Herriot, Nick will evaluate our monetary outcomes, after which Ari will present a industrial replace. We are going to then open the road for questions. And questions will probably be taken within the order they’re obtained.

And with that, I’ll flip the decision over to Herriot.

Herriot Tabuteau

Thanks, Mark. Good morning, everybody and thanks for becoming a member of Axsome Therapeutics fourth quarter and 12 months finish 2023 monetary outcomes and enterprise replace convention name. 2023 was one other robust 12 months for Axsome, constructed on targeted industrial execution for our first-in-class marketed merchandise and continued development and growth of our industry-leading neuroscience pipeline.

Throughout our first full-year as a industrial firm, Auvelity, our first-in-class oral, NMDA receptor antagonist and sigma-1 receptor agonist for despair, and Sunosi our DNRI, and agonist for extreme daytime sleepiness, generated mixed web product income of roughly $205 million. We anticipate continued income development in 2024, aided by our accomplished gross sales drive growth for Auvelity and growing consciousness of our differentiated merchandise. Later within the name, Nick will present particulars on our quarterly financials, and Ari will present extra info on our industrial efficiency.

Throughout 2023, our progressive growth pipeline additionally progressed and expanded. We made strong progress within the preparation of our NDAs for AXS-07 in migraine and AXS-14 in fibromyalgia. We superior our Section 3 trials of AXS-12 in narcolepsy and AXS-05 in Alzheimer’s illness agitation. We initiated a Section 3 trial program for solriamfetol in ADHD and introduced three extra new indications for solriamfetol. This progress positions us to ship on a number of, probably worth driving milestones all through 2024.

I’ll present a quick replace on our industry-leading neuroscience pipeline and anticipated milestones. Beginning with our two NDA stage merchandise. AXS-07 for the acute remedy of migraine is on observe for an NDA resubmission within the first half of 2024. The NDA submission for AXS-14 for the administration of fibromyalgia can also be monitoring for submission within the second quarter of 2024.

Now transferring on to our late-stage scientific packages. We’ve got accomplished enrollment within the Section 3 SYMPHONY trial of AXS-12 for the remedy of narcolepsy and we’re on observe to report top-line outcomes for SYMPHONY throughout the first quarter. For AXS-05, the Section 3 ADVANCE-2 trial within the remedy of Alzheimer’s illness agitation is monitoring for completion within the second half of 2024 primarily based on anticipated enrollment tendencies and up to date remedy market dynamics.

Turning to solriamfetol, the energetic molecule in Sunosi. In December, we held an Investor Day occasion the place doctor specialists offered the scientific and scientific rationale underlying the exploration of solriamfetol in new goal indications together with main depressive dysfunction, binge consuming dysfunction, and shift work dysfunction. We anticipate to provoke Section 3 trials in every of those indications within the first quarter. These new trials complement the continuing Section 3 FOCUS trial of solriamfetol in adults with ADHD. FOCUS is monitoring for top-line ends in the second half of 2024. Total, our growth portfolio encompasses 5 progressive late-stage patent-protected product candidates for 10 severe psychiatric and neurologic circumstances.

If efficiently developed, these investigational medicines have the potential to rework the remedy panorama for severe and difficult-to-treat CNS problems, which have an effect on greater than 150 million folks within the U.S. alone.

I’ll now flip the decision to Nick who will present particulars of our monetary efficiency.

Nick Pizzie

Thanks, Herriot, and good morning. As we speak we’ll focus on our fourth quarter and full-year outcomes and supply some monetary steerage. Complete product revenues have been $71.5 million and $204.9 million for the fourth quarter and full-year of 2023, representing year-over-year development of 193% and 309% respectively. This consisted of web product gross sales of $70.7 million and $202.5 million for the fourth quarter and full-year of 2023 and royalty income of $800,000 and $2.4 million respectively.

Complete product revenues for the comparable durations in 2022 have been $24.4 million and $50 million. Complete income for the full-year of 2023 was $270.6 million, which incorporates license income of $65.7 million from out-licensing Sunosi in sure ex-U.S. territories. Auvelity web product gross sales have been $49 million and $130.1 million for the fourth quarter and full-year of 2023, respectively, representing the primary full-year of commercialization for Auvelity. Auvelity was launched on October nineteenth, 2022, and had U.S. web gross sales of $5.2 million for the fourth quarter of 2022. Sunosi web product revenues have been $22.5 million and $74.8 million for the fourth quarter and full-year of 2023, representing 17% and 67% year-over-year development, respectively, and consisting of $21.7 million and $72.4 million in web product gross sales and $800,000 and $2.4 million in royalty income related to Sunosi gross sales in out-licensed territories respectively.

Sunosi web gross sales for the comparable durations in 2022 have been $19.2 million and $44.9 million. Complete Sunosi income for the full-year of 2023 was $140.5 million, which incorporates license income of $65.7 million from out-licensing Sunosi in sure ex-U.S. territories. Complete value of revenues have been $7.4 million and $26.1 million for the fourth quarter and full-year of 2023. Complete value of income for the comparable durations in 2022 have been $2.3 million and $5.2 million. Complete value of income for the full-year of 2023 included a one-time value of $5 million related to the income obtained on out-licensing Sunosi in sure ex-U.S. territories.

Analysis and growth bills have been $30.8 million and $97.9 million for the fourth quarter and full-year of 2023, respectively, in comparison with $14.7 million and $57.9 million for the comparable durations in 2022. The rise was primarily associated to the FOCUS trial of solriamfetol in ADHD, the development of ongoing trials of AXS-05 and AXS-12, manufacturing prices related to the anticipated NDAs for AXS-07 and AXS-14, post-marketing commitments for each Auvelity and Sunosi and better personnel prices, together with non-cash stock-based compensation.

Promoting, normal, and administrative bills have been $86.8 million and $323.1 million for the fourth quarter and full-year of 2023, respectively, in comparison with $61.5 million and $159.3 million for the comparable durations in 2022. The rise was primarily associated to commercialization actions for Auvelity and Sunosi, together with salesforce and advertising bills and better personnel prices associated to organizational development, together with non-cash stock-based compensation.

Internet loss for the fourth quarter of 2023 was $98.7 million, or $2.08 per share, in comparison with a web lack of $61.2 million or $1.41 per share for the comparable interval in 2022. The online loss within the fourth quarter of 2023 contains $63.7 million in non-cash prices comprised of $43.2 million in acquisition-related contingent consideration expense, reflecting our up to date gross sales projections for lately introduced new indications for solriamfetol. $18.9 million for non-cash stock-based compensation expense and $1.6 million of non-cash intangible asset amortization.

Internet loss was $239.2 million, or $5.27 per share for the full-year of 2023 in comparison with a web lack of $187.1 million, or $4.60 per share for the full-year of 2022. The online loss for the full-year contains whole non-cash prices of $117.9 million, which incorporates $62.6 million of inventory compensation expense, $48.9 million in honest worth of contingent consideration expense, and $6.4 million in intangible amortization in comparison with $37.7 million, $3.3 million, and $4.1 million respectively for the full-year of 2022.

Auvelity and Sunosi GTN low cost in This fall of 2023 have been each roughly 50%. Q1 sometimes has a damaging seasonality impact on GTN. As a reminder, the GTN low cost for Auvelity in Q1 of 2023 was within the excessive to higher 50s and within the mid-50s for Sunosi as a result of seasonal Q1 GTN dynamics. We’d due to this fact anticipate an analogous GTN in Q1 of 2024 for each merchandise. We ended 2023 with $386.2 million in money and money equivalents in comparison with $200.8 million at December 31, 2022. We imagine that our present money stability is enough to fund anticipated operations into money movement positivity primarily based on the present working plan.

I’d now like to show the decision over to Ari who will present a industrial replace.

Ari Maizel

Thanks, Nick. Axsome accomplished our first full-year as a industrial firm by delivering robust efficiency for each of our on-market merchandise. Beginning with Auvelity. Within the fourth quarter, roughly 84,000 prescriptions have been written for Auvelity, representing 23% quarter-over-quarter development. This efficiency contrasts with a decline of 1% for the general antidepressant market throughout the identical interval.

Moreover, practically 17,000 new sufferers began Auvelity within the quarter, bringing the whole variety of distinctive sufferers handled with Auvelity since launch to roughly 71,000. Within the fourth quarter, greater than 3,500 first-time Auvelity prescribers have been activated by our gross sales workforce, growing the cumulative whole variety of prescribers since launch to almost 17,000. Payer protection was steady in This fall as Auvelity stays accessible to sufferers representing roughly 70% of lined lives. We proceed to progress in conversations with main plans in PBMs throughout all channels as we pursue entry enhancements for sufferers.

Auvelity efficiency within the quarter was primarily pushed by specialists in psychiatry practices, with each Psychiatry MDs and nurse practitioners and doctor assistants, or NPPAs contributing to sturdy development within the quarter and over the course of 2023. As well as, we noticed significant traction throughout the main care section amongst each MDs and NPPAs because the early affect from our latest gross sales drive growth started to take maintain with elevated name exercise in main care workplaces.

In a latest survey of suppliers in psychiatry and first care who deal with a big proportion of despair sufferers, key drivers of Auvelity prescribing cited by respondents embody speedy onset of motion and low affect on weight achieve and sexual dysfunction. As well as, adopters be aware the constructive affect of Auvelity has demonstrated on day-to-day affected person functioning and its enhancements in affected person perceptions of high quality of life.

Axsome has established a robust industrial basis to help continued Auvelity development in 2024, with roughly 260 gross sales representatives calling on 44,000 well being care suppliers and continued funding in our industry-leading digital-centric commercialization platform. We’re well-positioned to speed up our schooling and consciousness aims throughout the predominant despair treaters within the U.S.

An enhanced model story for 2024 has been created to reinforce supplier perceptions of Auvelity and is anchored on Auvelity’s key attributes. Auvelity is a speedy appearing antidepressant that works quick and lasts with speedy symptom enchancment noticed at week one, substantial symptom enchancment noticed at week two, and each sustained and substantial symptom enchancment noticed at week six. Auvelity has a well-established security and tolerability profile that features low affect on weight and sexual dysfunction and no threat of motion problems or extrapyramidal signs.

Additional, Auvelity is the one oral antidepressant that modulates each glutamatergic and monoaminergic pathways, a key level of consideration because the position of glutamate in despair is more and more understood and accepted throughout the clinician panorama. We’re very optimistic about Auvelity’s development prospects in 2024 and its long-term blockbuster potential.

Transitioning now to Sunosi. Complete prescriptions have been simply over 42,000 representing 2% sequential quarterly development and 18% development versus This fall of 2022. Roughly 3,600 new sufferers began Sunosi remedy throughout the quarter, bringing the whole variety of distinctive sufferers handled with Sunosi to 65,000 since launch. Though extreme daytime sleepiness is a smaller market with a extra restricted prescriber base, we proceed to activate new prescribers together with greater than 400 throughout the fourth quarter alone, for a complete cumulative prescriber base of greater than 12,000 since launch.

The sphere workforce is concentrated on speaking the wanted urgency to deal with extreme daytime sleepiness signs and obstructive sleep apnea and narcolepsy, with disproportionate deal with the practically 2000 energetic weekly prescribers within the house. Payer protection for Sunosi was constant in This fall, with a complete of 83% of lives lined throughout all channels.

In a latest survey of Sunosi adopters, key attributes driving demand for the product cited by respondents embody vital and sustained affect on the Epworth sleepiness scale, a market main 9 plus hours of wakefulness noticed in Section 3 scientific trials and vital enchancment in patient-reported outcomes at week 12. We’re very happy with our industrial effort for Sunosi and anticipate continued development in 2024.

In closing, Axsome delivered compelling industrial efficiency in This fall 2023 because the optimization of our industrial infrastructure took form and we accomplished our first full-year as a industrial firm. Anecdotal suggestions from suppliers and sufferers continues to bolster our perception that Auvelity and Sunosi are distinctive and differentiated remedy choices of their respective indications and helps our rising confidence that Axsome is reshaping the remedy panorama for CNS circumstances.

I’ll now flip the decision again to Mark for Q&A.

Mark Jacobson

Thanks, Ari. Operator, might we please have our first query?

Query-and-Reply Session

Operator

Thanks. [Operator Instructions] Our first query at this time is coming from Leonid Timashev from RBC Capital Markets. Your line is now stay.

Leonid Timashev

Thanks for taking my query. Perhaps I am going to begin off with a query on the ADVANCE-2 readout. I assume, are you able to possibly present just a little bit extra shade on what drove the slip in timelines? I assume what’s driving the slower recruitment? Is there any reflection on the potential market alternative from that? And any dangers to trial integrity, particularly as normal of care evolves? Thanks.

Herriot Tabuteau

Properly. Thanks for that query. I feel the second a part of your query, which is the evolving nature of the usual of care, that is actually what’s driving this. This is a sign that we’re actually enthusiastic about, and we did need to keep in mind the latest launch of Brexpiprazole and any potential affect that might have an enrollment. As a reminder, Brexpiprazole is the primary drug that’s accredited on this indication. So our inside analytics workforce has been monitoring very intently the prescription tendencies, and what we have seen is a transparent inflection in prescribing, which we attribute to that new indication.

So our revised steerage incorporates this new info. Having stated that, we’re assured that we should always be capable to ship information this 12 months. Ari any additional feedback in regards to the evolving remedy panorama in Brex?

Ari Maizel

Sure, I’d simply say associated to the Brexpiprazole improve, we’re seeing a considerable improve throughout the Medicare channel, which we tied on to the ADA indication. However I feel that is additionally actually constructive information for AXS-05. Clearly, there’s vital unmet remedy want, and that provides us nice confidence for the long run with AXS-05.

Leonid Timashev

Acquired it. Thanks.

Operator

Thanks. Subsequent query at this time is coming from Charles Duncan from Cantor Fitzgerald. Your line is now stay.

Charles Duncan

Hey. Sure. Good morning, Herriot and workforce. Congrats on a fantastic 12 months of commercialization. I did need to follow-up on a query on AXS-05. However first, with regard to industrial efficiency for Auvelity, I am questioning in the event you can present any sense of persistence. I do know it could be just a little bit too lengthy, however you talked about for the branding quick and final, when it comes to exercise, I am questioning what you possibly can see when it comes to refills and sufferers staying on drug?

Herriot Tabuteau

Thanks for a query, Charles. It is nonetheless just a little too early to share any info on persistency and adherence. What I’ll say is the suggestions we’re receiving from sufferers and clinicians means that the scientific profile from Section 3 is holding up in the actual world. So we anticipate to generate extra information sooner or later. However for now, suffice it to say that what we’re seeing in the actual world is reflective of the Section 3 scientific trial outcomes.

Charles Duncan

Okay,. That is useful. And if I might comply with on to the final query relating to AXS-05 and ADVANCE-2. I am questioning when you have any modified perspective on the chance of success given Otsuka’s 786 information lately? After which additionally when it comes to the open-label extension, are sufferers enrolling into that? And the way does that look like going, possibly sure simply type of broadly?

Herriot Tabuteau

Yeah. Thanks for the questions, Charles. With reference to the Otsuka readout, we do not suppose that that has any significant read-through to our product. Now we watch any information readout or any developments within the house for any potential learnings to our scientific growth. Nevertheless, we expect that the very best information to have a look at once you’re fascinated by the potential of AXS-05 in Alzheimer’s illness agitation is the information that we have generated with our personal product. And as a reminder, we now have now accomplished two Section 3 trials which have been placebo-controlled, each of which had constructive outcomes.

So we expect that that’s info which is extra related than info with different molecules. And in the event you then take it one step down and truly have a look at the merchandise themselves, they’re completely different molecules totally. So, AVP-786, as a reminder, it is a deuterium-modified dextromethorphan, whereas AXS-05 incorporates non-deuterium-modified dextromethorphan. And the inhibitors are also completely different. So we use an aminoketone after which they use quinidine.

So, very completely different. After which, because it pertains to the open label security extension trial, that’s going effectively. And the overwhelming majority of sufferers who’re rolling out of our ADVANCE-2 trial are opting to enter the open label security extension. We expect that that may be a good indicator of how the caregivers are fascinated by the product.

Charles Duncan

Okay, superb. Thanks for the added shade, Herriot. I am going to hop again within the queue.

Operator

Thanks. Subsequent query is coming from Ash Verma from UBS. Your line is now stay.

Ash Verma

Hello. Thanks for taking our questions. I had two, each on AD agitation. So possibly simply on the ADVANCE-2 research. Are you attempting to recruit naive affected person to remedy? And that is why you need to type of exclude anybody who has began remedy on Rexulti? That is the primary one. After which second. Simply quick forwarding to once you assume that this could come to the market, would you have to primarily deal with the long-term care amenities the place plenty of these sufferers broadly reside? And simply curious what kind of gross sales footprint that may require versus, I feel your BCC platform is type of extra like footprint? Thanks.

Herriot Tabuteau

So thanks for the query. The reply is sure, we’re recruiting primarily naive sufferers and we’d need to exclude of us who’re on Rexulti for apparent causes. After which our revised steerage does keep in mind any potential affect on shedding sufferers as a result of now sufferers do have a remedy possibility which is accredited. And when it comes to long-term care amenities, our research to date have been performed in the neighborhood setting.

We expect that is the place nearly all of sufferers reside who’ve this indication. And one of many issues that we’re enthusiastic about because it pertains to the profile of AXS-05 in Alzheimer’s illness agitation is that it might probably maintain sufferers out of long-term care amenities, in different phrases, maintain them at residence with their family members.

Operator

Thanks. Subsequent query is coming from Joon Lee from Truist Securities. Your line is now stay.

Unidentified Analyst

Good morning. That is [indiscernible] on for Joon. Thanks for taking the questions. I used to be questioning in the event you might touch upon what the breakdown of sufferers on Auvelity at the moment is round what % are first line? After which additionally, simply need to make clear. Is the expanded salesforce absolutely on-line now? And may you touch upon in the event you suppose present TRx tendencies are reflective of the complete 260% salesforce? Thanks.

Herriot Tabuteau

Properly, thanks. I am going to flip that over to Ari.

Ari Maizel

Thanks for the query. So we’re seeing a significant enchancment when it comes to earlier line remedy. Over the course of 2023, we noticed significant will increase in first and second-line remedy each quarter. So at this time there’s roughly 40% to 50% of sufferers receiving Auvelity within the first or second-line setting. We anticipate that development to proceed over time. Concerning your salesforce growth query. We’re absolutely full with the expansions. We employed the extra representatives on the finish of final 12 months, accomplished coaching in January of this 12 months.

We’re beginning to see significant affect when it comes to name exercise. Specifically, we’re seeing improve proportionally of calls to the first care section. We’d anticipate the TRx and NBRx tendencies to proceed to extend over the course of the 12 months and there will probably be a ramp starting in Q1. So extra particulars to come back. However we’re very happy with the elevated area drive effort post-expansion.

Unidentified Analyst

Thanks.

Operator

Thanks. Subsequent query is coming from Jason Gerberry from Financial institution of America. Your line is now stay.

Jason Gerberry

Hey guys, good morning. Thanks for taking my questions. Simply needed to follow-up on the ADA enrollment dynamic with Rexulti. I assume after we have a look at development of this model on a TRx foundation, that inflection would not appear apparent. So I am questioning if we must be a special metric to gauge that inflection. I do not know if it is affected person enrollment kinds or claims, however on condition that’s an enormous market, I am just a little shocked that given the TRx transfer that we have seen, that it is being characterised as an inflection. After which is the expectation nonetheless that you just’d get each long-term security and efficacy information in second half and then you definitely’d be capable to file in second half? Simply questioning if the submitting timeline continues to be on observe. Thanks.

Herriot Tabuteau

Thanks for the query. We’ve got not given steerage on submitting. In order that’s going to be decided by the completion of our long-term security extension trial. That is the gating issue there. And as regards to what we’re seeing from our inside analytics workforce on Rexulti, I am going to flip it over to Ari.

Ari Maizel

Sure, thanks Jason. My suggestion and what we have been is claims-based information by payer channel and our commentary is that Brexpiprazole is growing considerably throughout the Medicare channel. So that’s what we attribute the expansion to the ADA indication too.

Jason Gerberry

Okay. Thanks.

Operator

Thanks. Subsequent query is coming from David Amsellem from Piper Sandler. Your line is now stay.

David Amsellem

Hey, thanks. So only a couple. First, on AD agitation, are you able to discuss in regards to the potential for branding it otherwise from Auvelity and pricing it otherwise? Simply on condition that it is a Medicare Half D market and clearly completely different from the despair panorama? In order that’s primary. Then quantity two. Couple simply on reboxetine. One, are you able to discuss in regards to the timeline to an NDA and gating elements past the research to an NDA submitting in narcolepsy, cataplexy? After which how are you fascinated by pricing in that market? You have received on one finish of the spectrum, Pitolisant. You have received on the opposite finish of the spectrum, solriamfetol in narcolepsy. So how are you fascinated by that? Thanks.

Herriot Tabuteau

Positive. So a few questions there round branding and pricing for each merchandise, and I am going to let Ari present some shade on how we’re fascinated by these two issues. I’ll preview it by saying that clearly we’re fascinated by what we’ll do there and what our choices are and we’d not be capable to remark an excessive amount of till we make a ultimate dedication. And because it pertains to AXS-12 in narcolepsy and the NDA timing. The gating issue there will probably be our long-term security extension trial. So we’re monitoring that. That’s enrolling and so we have to full that and have that learn out as a way to full our bundle for the NDA.

Ari Maizel

Sure. Thanks for the query. Concerning the branding and pricing dynamics for AXS-05 we’re at the moment performing an evaluation to raised perceive the potential affect of getting the identical model or completely different manufacturers. And there are plenty of issues that can go into it, together with guaranteeing readability round affected person dosing administration, potential halo impact related to a number of indications, the truth that there’s comorbid despair in roughly 40% of Alzheimer’s sufferers. So there are plenty of issues and we’ll share extra particulars sooner or later. And relating to the reboxetine pricing, that is one other space of research that we’re at the moment exploring and we’ll share extra particulars sooner or later.

David Amsellem

Thanks.

Operator

Thanks. Subsequent query at this time is coming from Joseph Thome from TD Cowen. Your line is now stay.

Joseph Thome

Hello there. Good morning and thanks for taking my questions. Perhaps the primary one on AXS-12. I do know the AXS-12 research are actually solely empowered for cataplexy and it is just a little unclear if we will really get the sleepiness scores, however are you able to discuss just a little bit from a clinician perspective, is it vital to additionally see a sign on sleepiness along with cataplexy? Or type of are you able to are available with one other therapeutic like Sunosi to handle the sleepiness part? After which second on Sunosi in MDD, how ought to we be fascinated by timelines to information on that? If I keep in mind GEMINI took about six months from first affected person dose to really seeing information. So is it potential that we might see Sunosi MDD information this 12 months, or what are type of the primary variations between GEMINI and this research that might make that probably not the case? Thanks.

Herriot Tabuteau

Thanks for the questions. With reference to AXS-12, we’re very shut to a knowledge readout, so we’ll will chorus from making any feedback round that. Look we’re so shut and we’ll know very quickly what the profile is within the Section 3 trials. Now, we do suppose that the product ought to have a good placement within the remedy paradigm that enhances solriamfetol and different remedy choices. And we’re trying ahead to the information readout as a result of that can present us the primary Section 3 information to enrich the Section 2 information that we have generated to date.

And when it comes to Sunosi as regards to MDD, we’ll have extra to say about that, hopefully, as soon as we announce enrollment of the primary affected person in that research that continues to be on observe to begin this quarter.

Joseph Thome

Thanks.

Operator

Thanks. [Operator Instructions]. Our subsequent query is coming from Marc Goodman from Leerink Companions. Your line is now stay.

Marc Goodman

Sure. Good morning. Nick, are you able to discuss how we’re fascinated by spending this 12 months? After which secondly, you discuss how you’ve gotten sufficient money to get to money movement positivity. Are you able to give us a way of when that’s? After which secondly, Herriot, are you prepared to provide us a way of what % of the AD agitation research is enrolled? Are you 50%, 60%, 70%? Perhaps you can provide us a way of that. Thanks.

Nick Pizzie

Positive. Sure, thanks Marc. In order for R&D, our expense for the quarter was $31 million, just below $31 million for This fall. That ticked up barely from the earlier quarter. We anticipate R&D spend to extend regularly as solriamfetol Section 3 trials begin throughout the 12 months. This improve may also be offset, although by decrease scientific prices because the SYMPHONY, ADVANCE-2, and FOCUS trials full in 2024, and in addition as soon as AXS-14 and AXS-07 NDAs are filed. As for the SG&A line, whole expense for the quarter was just below $87 million. That was additionally a slight improve from the earlier quarter.

As you already know, as we talked about, the largest improve in SG&A was as a result of salesforce growth, which passed off all through This fall. As that growth occurred all through the quarter, roughly half of the quarter’s expense for that growth was realized in This fall, so we’d anticipate a slight improve in Q1, as we’ll notice the complete burden of that growth.

After which from a money movement positivity or profitability, we’re nonetheless on the early levels of the early launch and a bit greater than a 12 months faraway from the acquisition of Sunosi. We have modeled numerous situations, and primarily based on the success that we have had to date, we really feel very assured of our potential to be money movement constructive. As you are conscious, the launches by nature are very unstable, and as such, we’ve not offered any steerage on a particular timeline for money movement positivity. Herriot, do you need to take the following query?

Herriot Tabuteau

Sure. No, thanks, Marc for the opposite query. We’ve not offered a particular share enrollment in our trials recently. Nevertheless, AD agitation, we’re assured that we should always be capable to have outcomes this 12 months. Operator, our subsequent query?

Operator

Our subsequent query is coming from Graig Suvannavejh from Mizuho. Your line is now stay. Graig, your line is now stay, maybe your telephone is on mute. Go forward, Graig your line is now stay.

Graig Suvannavejh

Are you able to hear me?

Operator

Sure, please, go forward.

Graig Suvannavejh

Thanks. Okay, nice. Thanks. So sorry about that. Congrats on the quarter. Simply two questions. One, simply are you able to touch upon the Auvelity DTC efforts? And any ideas round how that effort would possibly evolve in 2024? And your stage of satisfaction with what you have carried out to date, and what’s wanted on a go-forward foundation? After which secondly, simply as we take into consideration the potential of solriamfetol in MDD. Might you simply remind us on how we should always take into consideration the differential positioning of that product with Auvelity? Thanks.

Ari Maizel

Hey, Graig. Thanks a lot. That is Ari. Admire the query. As you already know, we do have a DTC effort at this time largely targeted on digital engagement. We have been very happy with that funding to date. What we noticed by market analysis is sort of eight in 10 sufferers who ask for Auvelity obtain it. And so we’re very optimistic about continued funding in shopper promoting, and we’re assessing extra investments for the time being. And so we’d anticipate to share some updates later within the 12 months primarily based on whether or not we intend to extend the funding round shopper promoting.

Because it pertains to solriamfetol in MDD, as you already know, MDD is a extremely heterogeneous situation. Not all sufferers reply to the identical kinds of remedies, and since there are overlapping signs with different sicknesses particularly signs that could be tougher for some sufferers than others, there’s normally room for a number of remedy choices to assist these sufferers. And so till we now have extra information round solriamfetol and MDD, it is just a little untimely to speak about co-positioning with Auvelity. However primarily based on our expertise on this house, we do imagine that there will probably be alternatives for each merchandise to assist sufferers obtain significant symptom aid.

Graig Suvannavejh

Thanks.

Operator

Thanks. Subsequent query is coming from David Hoang from Citigroup. Your line is now stay.

David Hoang

Thanks. Good morning, and thanks for taking the questions. Congrats on the quarter. So possibly simply two from me. First, on Auvelity, might you present any shade round your ongoing payer discussions within the industrial channel and expectations to enhance the protection there above the present, I feel 48%, or so of lined lives? After which relating to solriamfetol in ADHD, as soon as the outcomes of the FOCUS research are in hand, what else could be wanted to proceed to an FNDA submitting there if these outcomes are constructive? Thanks a lot.

Herriot Tabuteau

Positive. So we’ll take the questions in reverse order. For solriamfetol, the FOCUS research is in adults and we will probably be launching a Section 3 trial within the pediatric inhabitants. So each of these research, each of these affected person populations are wanted for an NDA submitting.

Ari Maizel

Sure. And associated to the payer discussions, as you talked about, we now have roughly 48% protection in industrial channels, 70% total throughout channels. The way in which we take into consideration the payer dynamics is we’re taking a really disciplined method to contracting to protect long-term profitability for our merchandise. Nevertheless, we do anticipate increasing protection over time and stay actively engaged with well being insurers to enhance entry for insured sufferers. I’ll point out that our present investments in each affected person financial savings packages, in addition to reimbursement companies will help continued prescription development at present ranges of protection, which as I discussed earlier than, stays 70% of lives for Auvelity.

Operator

Thanks. Our subsequent query is coming from Myles Minter from William Blair. Your line is now stay.

Myles Minter

Hey, thanks for taking the questions. Simply on the Teva ANDA filings that I do know are energetic, I seen that you just lately received new IP listed within the FDA Orange Ebook with the patent expires at 2043. Have you ever received Chapter 4 filings in opposition to these patents that we’d not pay attention to? After which secondly, simply again on the 48% protection within the industrial channel. That is flat quarter-over-quarter, but your conversations are progressing. What’s the sticking level with a few of these main payers which have but to get on-line with Auvelity for the time being? Is it extra about formulary positioning, threat profit, or is it merely simply coming down to cost? Thanks.

Hunter Murdock

Sure. Thanks for the query. That is Hunter Murdock. So sure, we do have patents going out to 2043 and we do have Paragraph IV filings in opposition to them which we filed swimsuit in opposition to. So it’s public info that we do have these three Paragraph IV certifications regarding 2043 patents. In order that’s with the Teva litigation.

Ari Maizel

And that is Ari. Concerning your touch upon the 48%. Sure, it’s steady quarter-over-quarter. Each payer dialogue is completely different. In some instances, it is associated to final worth. In some instances, it is associated to utilization administration parameters. And so we’re progressing these conversations. We’re having significant discussions, nevertheless it takes time they usually’re ongoing negotiations and hopefully, we’ll be capable to share some updates subsequent quarter.

Myles Minter

Okay. Thanks for the questions. Congrats on the 12 months.

Operator

Thanks. Our subsequent query at this time is coming from Yatin Suneja from Guggenheim Securities. Your line is now stay.

Eddie Hickman

Hey guys. Thanks for taking my query. That is Eddie on for Yatin this morning. Concerning that Brexpiprazole improve within the long-term care channel since their ADA approval. Is {that a} good comp for the way the Auvelity launch might inflect on upon approval? Or does the completely different security profile or black spot warnings make Auvelity a extra engaging possibility for this inhabitants? After which what extra industrial infrastructure would you have to see that type of inflection, like Brexpiprazole noticed if accredited? Thanks.

Ari Maizel

Sure, thanks for the query. Only one clarification. We do not have information to counsel improve in Brexpiprazole in long-term care. It is within the Medicare channel. And so I feel extra information could be wanted to grasp whether or not it is within the long-term care setting or in outpatient. And I do suppose it is just a little untimely to counsel that it is a good analog for AXS-05. These merchandise do have completely different scientific profiles. AXS-05 is a non-atypical antipsychotic.

It has a barely completely different profile total and we anticipate there to be significant development inside that indication if accredited in each the outpatient settings in addition to long-term care as Herriot prompt earlier in our trials, we’re targeted in outpatient settings with a hope to delay sufferers going to long-term care amenities. By way of industrial infrastructure, we’re clearly evaluating our salesforce dimension and construction relative to the general pipeline and we do anticipate to have a significant presence in long-term care amenities.

Nevertheless, our current salesforce is primarily targeted on outpatient care practices, which we anticipate will proceed even for ADA. So extra particulars to come back, however we really feel very assured that we’ll be capable to have an environment friendly promoting effort primarily based on the shared name factors or many of the indications that exist in our pipeline in addition to our on-market merchandise.

Eddie Hickman

Nice. Thanks and congrats once more.

Operator

Thanks. We’ve got time for questions from two extra analysts. Our subsequent query is coming from Matt Kaplan from Ladenburg Thalmann, your line is now stay.

Matthew Kaplan

Hello, thanks for taking the questions, and good morning guys. Simply possibly a query for Ari when it comes to now that you have accomplished the salesforce growth, when ought to we begin to see an affect of that new salesforce? And I assume over the course of the 12 months, is it actually first half or second half after we begin to see them gaining traction?

Ari Maizel

Sure. Thanks for the query. We anticipate to see a ramp when it comes to affect over the course of the 12 months. Clearly, nearly all of the growth representatives have been employed late final 12 months. We accomplished coaching in January of this 12 months. It takes time to undergo name cycles and to construct confidence with the model tales and messaging and in addition to increase our attain into the first care setting. And so we anticipate the construct to happen over the course of the 12 months. We’re beginning to see some significant affect when it comes to name exercise and we’d anticipate demand tendencies to have corresponding will increase over the course of the 12 months.

Matthew Kaplan

Okay, that is useful. After which possibly a query for Herriot. You gave some added element when it comes to what is critical for submitting FNDA and ADHD. By way of the opposite indications you are pursuing in Section 3 for solriamfetol, MDD, binge consuming dysfunction and shift work, what could be crucial there? Is it — they each, all of them embody two Section 3 trials or might some be with one?

Herriot Tabuteau

Positive. With reference to solriamfetol in MDD. So there we anticipate that we would wish two Section 3 trials. So we’re launching our first Section 3 trial, as you already know this quarter binge consuming dysfunction, equally, we anticipate that we are going to want two Section 3 trials. And we’re additionally on observe to launch the primary Section 3 trial this quarter. For shift work dysfunction, we solely want one Section 3 trial to file an FNDA.

Matthew Kaplan

All proper. Properly, thanks for taking questions guys.

Operator

Thanks. Our ultimate query at this time is coming from Vikram Purohit from Morgan Stanley. Your line is now stay. Vikram, maybe your telephone is on mute.

Vikram Purohit

Hello, good morning. Are you able to hear me?

Operator

Please proceed.

Vikram Purohit

Thanks. Good morning. Thanks for taking our questions. So we had two industrial questions one on ADA, one on MDD. So for ADA, assuming ADVANCE-2 is constructive and AXS-05 is accredited for the indication. What would you anticipate the annual length of remedy to be on this setting, given the potential variations within the quantity and length of agitation episodes that sufferers with AD can expertise? After which secondly, in MDD, do you suppose Auvelity gross sales steerage is a chance this 12 months? And in that case, what are a number of the metrics and points of the launch that you just’re monitoring to gauge whether or not steerage is cheap to offer? Thanks.

Herriot Tabuteau

Thanks for the questions. With reference to length of remedy and Alzheimer’s illness agitation. So, Alzheimer’s illness agitation is seen as a power situation and that is how we have been learning it. And that’s additionally reflective of how the FDA thinks about it from suggestions that we have gotten from them. So we do have, as you already know a long-term open label security extension trial, which is ongoing. So sufferers have been on drug now for a reasonably very long time. So the research, it is a one-year trial.

Nick Pizzie

Sure certain, Vikram. Hey, that is Nick. Because it pertains to the gross sales steerage, given the comparatively quick time period since launch and evolving dynamics, together with the rise in gross sales drive effort in addition to variability with market entry, we’re not prepared to offer forward-looking steerage on gross sales, which is probably going the case for everything of 2024 at this level.

Vikram Purohit

Acquired it. Thanks.

Operator

Thanks. We reached finish of our question-and-answer session. I would like to show the ground again over to administration for any additional or closing feedback.

Herriot Tabuteau

Properly, thanks for taking the time to hitch us for at this time’s quarterly replace. 2023 was a robust 12 months for Axsome. We entered 2024 with a rising industrial enterprise and a late-stage neuroscience pipeline that encompasses 5 progressive candidates in growth with the ten severe neuropsychiatry indications. We sit up for offering a number of updates all year long on our progress. Thanks and have a fantastic remainder of your day.

Operator

Thanks. That does conclude at this time’s teleconference webcast. You might disconnect your line at the moment and have a beautiful day. We thanks to your participation at this time.