Q4 2022 Axsome Therapeutics Inc Earnings Call
Speaker 1: Person.
Speaker 1: I re.
Speaker 2: are in listen-only mode. Later there will be a question and answer session and instructions will follow at that time.
Speaker 2: If you have any need to require operator assistance during the conference, please press star zero from your telephone keypad.
Speaker 2: As a reminder, today's conference is being recorded.
Speaker 2: I would now like to turn the conference over to your host, Mark Jacobson, Chief Operating Officer at Axum Therapeutics. Please go ahead.
Speaker 3: Thank you, Ocordo. Good morning and thank you all for joining us on today's conference call.
Speaker 3: This morning we issued our earnings press release providing a corporate update and details of the company's financial results for the full year and the fourth quarter of 2022. The release crossed the wire a short time ago and is available on our website at Axilm.com.
Speaker 3: During today's call we will be making certain forward-looking statements. These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of our investigational agents, our clinical and non-clinical plans, our plans to present or report additional data, the anticipated conduct and the source of future clinical trials, regulatory plans.
Speaker 3: future research and development plans, all commercial plans regarding some nosy, ovalsity in our pipeline products, revenue projections, and possible intended use of cash and investment.
Speaker 3: These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in their forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly annual reports.
Speaker 3: You are caution enough to place on due reliance on needed forward-looking statements which are only made as of today's date and the company disclaims any obligation to update special statements. Joining me on the call today are Dr. Ariel Tabutso, Chief Executive Officer, Nick Peasy, Chief Financial Officer, Laurie Engelberg, Executive Vice President of Commercial and Business Development.
Speaker 3: Ariel will first provide an overview of the company and then repeat progress made during 2022 in the fourth quarter as well asished to have a follow- avoiding a fullie trial after Scroll under any Courier TV
Speaker 3: Following the area Nick will review our financial results and then Lori will provide a commercial update including details on the first quarter of the valley sales and Our second quarter with Sanozzi will then open the line for questions Questions will be taken in order. They are received and with that I will turn the call over to Ariel
Speaker 3: Well, thank you Mark, good morning everyone and thank you all for joining Axon Therapeutics year-end for 4.22 financial results and business update conference call.
Speaker 3: 2022 was a transformative year for Axon as we successfully transitioned to commercial stage and delivered on our goal to become a leading C&S focused, biased pharmaceutical company. Now with two differentiated products, Lavelli and Samosie Commercialize, encouraging early launch metrics of Lavelli abroad in advancing late stage pipeline and a strong financial position.
Speaker 3: Axful is well positioned to continue to deliver significant value to patients and shareholders.
Speaker 3: The fourth quarter was an important milestone for Exo, as it is the first quarter with sales for both Obelii and Tsimosu.
Speaker 3: Total net product sales in the quarter was strong at $24.4 million. Later, Nick and Lori will provide further details on how financial and commercial performance.
Speaker 3: To preview some of these updates, I'd like to start by talking about the topic that brings us all here, which is making a difference for patients.
Speaker 3: In just more than a quarter, mobility has already been prescribed to thousands of patients and we have seen repeat prescribing by HCPs and refills by patients.
Speaker 3: more than a quarter, the ability has already been prescribed to thousands of patients and we have seen repeat prescribing by HCPs and refills by patients. Lori will provide additional perspective later.
Speaker 3: But this observation suggests that the unique mechanistic and clinical profile of the ability is having a positive impact on the treatment landscape for major depressive disorder and making a meaningful difference in the lives of MDD patients.
Speaker 3: Furthermore, with just half a year of smoky sales, that could be excellent relaunch efforts in the U.S. and overseas.
Speaker 3: We view potential force in the card indication to largely contact leading running of course significant potential future growth.
Speaker 3: We view the potential for scenarios in the current indication is largely on track, leaving room for significant potential future growth. Just last week.
Speaker 3: We announced an important, lasting, and significant deal for humanity, providing our new partner for an idea of commercial rights that's in the world in Europe and certain countries for the Middle East in Nevada.
Speaker 3: Phelanobia shares our excitement and commitment to maximize the potential of synopses for patients worldwide. Their strong commercial platform is well suited to expand the availability of and access for this important treatment in the licensed region. In addition to offering a full progress.
Speaker 3: Our broad, late-space CMS pipeline continues to advance, positioning us to drive further significant value creation in 2023 and beyond.
Speaker 3: Our leading scene of pipeline includes FSO7 from my brain, FSO5 for all members of the education and personal conversation, FSO5 for narcolepsy, FSO4 for fibromyalgia and Solvayamtol for ADHD.
Speaker 3: In the fourth quarter and subsequently, we made significant progress in our online risk of disease education program with the AXS05, including the announcement of positive top line results for the ACORE trial, advancement of the Advanced II trial, and obtaining FDA feedback on our development plan for AXS05 in this invitation.
Speaker 3: disease vaccination program were recently sought and received feedback from the FDA on the registration plan.
Speaker 3: The FDA requested generation of additional safety experience with BFS05 in this elderly population, including placebo-controlled safety information from the ongoing advance-to-trial, as well as long-term safety data in the target patient population consistent with ICHE1 guidelines.
Speaker 3: Based on this feedback, the company intends to submit an NDA for AXS05 after completion of the ongoing events to and openly will do the extension trials.
Speaker 3: In parallel we expect to issue the phase 2 free trial of FSO5 in smoking cessation in the fourth quarter of 2023. With regards to FSO7 for the acute treatment of migraine manufacturing activities related to the primary submission of the NDA for this product candidate are ongoing.
Speaker 3: and we expect the resubmission to occur in the second half of this year.
Speaker 3: OASF-12 is a product candidate for the treatment of nocalescine. Enrollment in the pivotal phase 3 symphony trial is progressive. And top line results are expected in the first half of 2023.
Speaker 3: As a reminder, the XS-12 has been granted off-and-go designation by the FDA for the treatment of modal disease. Our XS-12 product candidate, Ophagomyalgia, is also progressing with manufacturing and other activities related to the preparation of the plan and use of mission.
Speaker 3: ongoing and we expect to submit the MD for this product candidate in 2023. With regards to our re-enter call for synopses for the treatment of ADHD, we are preparing to initiate a page 3 trial of this indication in the first half of 2023. In the fourth quarter, we also share positive top line results from the SHARP trial.
Speaker 3: demonstrating improvement of cognitive function with soil reinfectile treatment and highlighting new mechanistic data for soil reinfectile on trial one. These results further highlight the clinical potential and differentiated pharmacology of this molecule.
Speaker 3: As you can see, the Axon team is busy and continues to be excited as we prepare to deliver ongoing commercial success and potentially hit on multiple pipeline milestones including clinical trial readouts and initiations and defilements over the next 12 to 18 months. I will now call over to Nick who will review our financial results.
Speaker 2: Thank you, Eriong. Good morning, everyone. Today, we'll discuss our fourth quarter and full year results and provide some financial guidance.
Speaker 3: Total revenue in the fourth quarter of 22 was $24.4 million consisting of net sales of our two commercialized products, the Bell and Cinecci. There were no net sales in the comparable prior period. The Bell and D was launched in the fourth quarter on October 19th and for the partial quarter generated net sales of $5.2 million.
Speaker 2: the reported international med sales reflect the parks quarter.
Speaker 3: Total revenue for the full year of 2020 was $50 million. Again, there were no reported sales for the prior year because the acquisition of Sanozzi and the launch of Velity both occurred in 2022. For the full year of 2022, Velity net sales were $5.2 million.
Speaker 2: For the full year 2022, Synosy generated total net sales to an maximum of $44.8 million consisting of US net sales of $43.9 million and international net sales of $900,000. As a reminder, the US portion of the acquisition of Synosy was completed on May 9. Cost of product sales were $2.3 million and $5.2 million for the fourth quarter and full year of 2022 respectively.
Speaker 2: with ongoing clinical trials, including post-marketing commitments for Sino-CN of LLD. Selling, General, and administrative expenses were $61.5 million and $159.3 million for the fourth quarter and full year of 2022 respectively, as 18.8 and 66.6 million for the comparable period in 2021.
Speaker 2: million or $1.41 per share, compared to a net loss of $34 million or 90 cents per share for the comparable period in 2021. The net loss for the fourth quarter included $10.8 million of non-cash stock compensation expense compared to $5.9 million in the comparable period in 2021.zo Noise
Speaker 2: Net loss was $187.1 million or $4.60 per share for the full year of 2022 compared to a net loss of $130.4 million or $3.47 per share for the comparable periods in 2021.
Speaker 2: The net loss for the full year of 2022 included $37.7 million of non-cash stock compensation expense compared to $20.8 million for the full year of 2021.
Speaker 2: We ended the year with $201 million in cash and equivalents, compared to $86.5 million as of December 31, 2021. During the fourth quarter, we did not utilize our 18th facility.
Speaker 2: In January of 2023, we amended our loan agreement with Hercules Capital to increase the size of the facility to $350 million, to reduce the interest rate, and to extend the maturity and interest only periods while accessing a $55 million tranche. Additionally, in February of 2023, the company received approximately $5.5 million in the first year of the loan agreement.
Speaker 2: $50 million term loan facility with Hercules Capital is sufficient to fund anticipated operations into cash flow positivity based on our current operating plan. I will now turn the call over to Lori who will provide a commercial update.
Speaker 4: Thank you, <expletive> . Q4 was certainly an exciting quarter for action with a lot of availability and a continued relaunch of synosities.
Speaker 4: Both of our commercial products address serious, highly prevalent conditions and bring meaningful innovation to millions of potential patients.
Speaker 4: We are pleased with our commercial progress on synosing, and although it is still early days, we are encouraged by availability launch progress. I will share key metrics from our commercial efforts for both brands, starting with synosing followed by availability.
Speaker 4: As a reminder, Synosy is the first and only VNRI for excessive daytime sleeping in obstructive sleep apnea and narcolepsy and the first and only weight promoting agent proven to improve weightfulness through nine hours.
Speaker 4: As a reminder, Synosy is the first and only VNRI for excessive daytime sleeping in obstructive sleep apnea and narcolepsy and the first and only weight promoting agent proven to improve weightfulness through nine hours. In the fourth quarter.
Speaker 4: Total prescriptions for synocy in the US grew 11% year over year and 1% quarter over quarter.
Speaker 4: For the full year 2022, US total synopses prescription showed strong growth with an increase of 21% versus 2021.
Speaker 4: The total prescription split by the diagnosed patient population for synosy is 70% for EDS due to OSA and 30% for EDS due to narcolepsy. Payer coverage for synosy remains broad with 96% of commercial lives and 83% of total lives covered.
Speaker 4: The growth potential for synopses in the currently approved indications remains substantial. We currently have only a 2% share of drug-treated OSA patients.
Speaker 5: and a 7% share in drug-treated narcolepsy patients. Spinosy is the only branded therapy available for patients who suffer from EDS and OFA, and we expect increased and enhanced promotional and disease education efforts to drive market share growth for the product in 2023 in the U.S.
Speaker 6: With recently announced licensing of ex-US marketing rights for synocy to farminovia, we are well positioned to increase the availability of the most important treatment to patients worldwide.
Speaker 7: Turning to availability. We lost availability on October 19th and despite launching in Q4, a traditionally challenging quarter due to multiple holidays.
Speaker 8: We saw early signs of encouraging uptake with our initial HTP adopters. With only ten full weeks of promotion in Q4, 2200 unique HTPs wrote prescriptions for over 6000 new patients.
Speaker 9: Those metrics have grown to 4,300 unique HTTP riders and over 13,700 new patients since
Speaker 10: Importantly, HGP's who have written ability are gaining critical early clinical experience and are reporting promising patient response that is consistent with what we saw in clinical trials.
Speaker 11: With many reportedly seeing, rapid-unquote action and rapid achievement have been mentioned. With regard to pay or coverage, the commercial channel is expected to be the primary channel for availability as it accounts for more than 60% of antidepressant prescription norms.
Speaker 12: Interactions with commercial payers as it relates to ability have been active and productive. Effective January 2023, we have contracted with one of the largest group purchasing organizations or GPOs. We have contracted with one of the largest group purchasing organizations or GPOs.
Speaker 13: for potential coverage of a valley. As a result, pharmaceutical managers or PVMs and health plans under this GPO will now be able to make formulary coverage decisions for a valley based on the contracted terms. The interactions with commercial payers are proceeding as expected.
Speaker 14: and Medicare plans have up to six months post launch to determine coverage and add ability to form an area.
Speaker 15: We expect additional formulary decisions over the next six months.
Speaker 16: I look forward to discussing more as the payer process progresses.
Speaker 17: We are extremely encouraged by the initial launch progress and remain committed to our launch focus of joining staff HCP adoption and powering patients.
Speaker 18: We are extremely encouraged by the initial launch progress and remain committed to our launch focus of driving fast HTTP adoption, empowering patients, and enabling quality access.
Speaker 19: We are all aware that there is a mental health crisis happening in the US, and major depressive disorder or MDD is a major public health concern with 21 million US adults diagnosed in 2020, and they reported significant increase in prevalence as a result of the pandemic.
Speaker 20: Abelity is an important new therapeutic option for patients living with this chronic and devastating condition and we are proud of our efforts to make Abelity available to patients living with NBD in their positions.
Speaker 21: I will now turn the call back to Mark to lead the Q&A discussion. Great. Thank you, Dori. Operator, may we please have our first question?
Speaker 22: I guess thank you. Our first question is from Charles Duncan, the Cantor Fitzgerald. Please excuse your questions. Yeah, hey, good morning. Thanks, Ariel, and team for that great overview and congrats on the good quarter. I had a couple of questions on Ability. One is commercial, one is more development.
Speaker 23: And that is regarding the commercial question. I'm just kind of wondering, I think, Laurie just said,
Speaker 24: addresses this question, but I'm wondering if she could drill down on any feedback she's getting from the market in terms of response rates and even persistence. Now I know it's too long or too early to know a real persistence, but what are prescribers seeing?
Speaker 25: in their patients with regard to comparison in patients who are experienced with SSRI-based therapy. Thanks. Hi, Charles. Thanks for the question and good morning. You're right. It is very early days. Hello, social distance shout out here. Hi, everyone.
Speaker 26: for us and most of what we're receiving back from the field is purely anecdotal, so I hope you take that for what it's worth. You know what we are hearing anecdotally is that patients are responding very consistent to labels so that rapid onset of action is happening. They are seeing very early achievement of remission.
Speaker 27: Again, it's a little bit too early to talk about durability across where we're just a few months into launch. But we have not seen anything that we would suspect would be different than what we see in the label or what we saw in the clinical trials. Yeah, and maybe to add to that, one of the things that you're...
Speaker 28: data, about 50 percent of the scripts were from retail.
Speaker 29: Okay, that's great to hear. Regarding TAM expansion efforts for 005 in Alzheimer's agitation, Ariel, you mentioned some feedback from the agency. I wasn't completely clear on that in terms of timing. I think that you mentioned
Speaker 30: possibly completing the trial in 24 versus prior 25 if you could provide more color on that and then explicitly you thought an NDA would happen after advance two but then also after an open label extensions study. So could you give us a sense of timing on when an NDA would happen?
Speaker 31: is going to be, frankly, faster than we had expected. We now expect for that study to read out in the first half of 2024. The open label extension trial had been ongoing, and we would also expect that to read out in 2024. And we've also wanted to be filing.
Speaker 32: we would be in a position to file an MBA within six months after the readout of those days. Okay, that's helpful. Thanks for taking my questions. Congrats and a good quarter. Thank you. Thanks for having me.
Our next question comes from the line of Mark Goodman with SVB. Please proceed with your questions. Ariel, just to continue on this agitation study, can you confirm, like, your discussions with FDA? Have they signed off on both studies from an efficacy standpoint and all we're waiting for now?
is the safety data. Can you just confirm that? And second question is, if y'all can help us with how to think about gross to nets for both products for this year. Thank you. Thanks for the question, Charles.
I'm sorry. Oh my God. All these self-adanalysts are starting to blurry to one. No, I, of course not. All of you are very distinct. So, um, so...
So Mark, with regards to the interactions with the FDA, we saw feedback on the trials. The feedback that we got from the agency is that in the elderly patient population, safety data is really important, not just long-term safety data, but also placebo-controlled safety data.
So the APOR trial, it was a randomized withdrawal study, so it does not provide the randomized safety data, which at the FDA event is really important in this patient population. And the other aspect of this study that we did highlight, not necessarily a showstopper, is the fact that this concern.
This was a truncated study. So importantly though, the feedback with regards to exact...
patient numbers for the safety database is that it must meet ICH E1 guidelines. What's good is we're in a good position to provide actually all those data points to the FDA. We do have the events one trial which is already ongoing which is enrolling.
And so, I'm sorry, the advanced two trials which have already been rolling and so we're in a good position to provide all the safety data which will be required for the NDA filing.
Aereo, if Advance 2 fails from an efficacy standpoint, then what? That would be speculation.
from an FSCC standpoint, then what? That would be speculation, but.
We are encouraged that we have two positive trials in this indication. Right, that's my question. Did the FDA agree that you have two positive trials? The FDA never agrees to anything until you five in the end of the year and they review it. I'm going to show you the year that the FDA.
We do have two positive trials. We're very encouraged by that, and we're on track to provide the safety information that would be needed for an E reach.
Okay, and then the gross dinettes for both products for this year, how do we think about that?
Yeah sure, hey Mark it's Nick. For gross net, so for the quarter for a belly I'll start with gross net for the quarter was in the 60s. As of right now we're not currently in a position to give specific guidance around GTN however we remind you that there's no reason to expect that's actually going to improve.
from this quarter and it obviously potentially worsened based on Q1 being typical, you know, the seasonality that you expect the headlands of plant coverage is resetting in year inclusive of deductibles, co-insurance. PAs would need to be, in some plans would need to be recreated again, so potential utilization, higher utilization of the copay card.
And then obviously mix and channel distribution always impacts GTN. So We you know, we would expect in Q1 and Q2 That we wouldn't expect anything better than where we're at today and potentially it could worsen Specifically around synosy, we were in the low 50s again for This quarter we did have a favorable adjustment from prior quarters of 1.8 million
the GTN adjustment as we received updated claims, which is typical that we receive them in this quarter. Otherwise, you know, for us to notice, it's pretty much been stable in the low 50s.
Thank you. You're welcome. Our next question is from the line of Vikram Prahit with Morgan Stanley . Please proceed with your questions. Hey, good morning. Thanks for taking our questions. So we had two on alveoli. The first...
Just wondering if you could provide some color on kind of the typical profile of patients that are currently receiving Ovality in terms of their prior treatment history and the lines of therapy They've been on prior to being prescribed a melody and then secondly, I just wanted to see if you could provide an update on ex-us commercialization and partnership discussions if Those have been happening and if so What you'd be looking for in a potential partner for for a XO 5x us. Thanks
I'll take that, sorry. So currently, as we've mentioned, multiple times and as a standard, most of the commercial plans have ability to be in an NDC block, which requires...
quite an effort to get patients online, which is why we're really excited about the demand that we're driving despite these challenges. However, due to that, line of therapy use has been a relatively later line right now, with about 28% sitting in second line and 61% sitting in third line plus. The response has been...
Again, to the question I answered with Charles, the response has been very, very consistent with label. And to see that in later line patients is extremely encouraging. Just with regards to the second part of your question, which relates to what we would be looking for with regards to a potential partner.
or around the XUS. I think one of the things that we would look for is a partner with Peruvian capabilities and also a partner that has experience with regards to navigating the pretty complex re-emergent landscape in certain geographies such as Europe .
I think, what, 50 patients from a cord went into randomized withdrawal, and then you'll have like 175 under the current enrollment plan for advanced students. So just curious how you get to the 300. And then if you can comment on how we should be thinking about SG&A and off X ramp is 4 Q2 022 on an annualized basis, sort of a good place to think about some growth off of that number or.
Is there going to be any step up from there? And then just, you know, last question, any comments on any inventory launch stocking here on the fourth quarter number? Thanks.
Is there going to be any step up from there? And then just last question, any comments on any inventory launch stocking here on the fourth quarter number? Thanks. Well, yeah, I'll take that.
The first question and then we'll take the others. The answer is no, we do not anticipate having to increase enrollment in advance two to meet the required patient safety database. Just as a reminder, we do have patients from advance one in terms of general safety experience, but then we also have 170 patients as a reminder who were enrolled in period one of the core trial. And a lot of those patients went into the open label.
safety extension trial. So if you take the patient's rollover from award as well as the expected patient's rollover from advanced to, that should put us in pretty good shape. Nick? Sure. Hey, Jason. So related to optics guidance, I think you mentioned using Q4 essentially as a proxy. I think that's a fair estimate. We've stayed in the press release.
on the SG&A piece as it relates to thinking about 2023 on a quarterly basis. And then I think your other question broke up a little bit, but I think your question was related to inventory to channel and where we were at the end of the year.
For Vellity, we have roughly two and a half weeks of future demands in the channel. It's obviously the growth brand, we just launched it and we do expect internal levels to fluctuate at our distributors as Vellity builds additional momentum in the market. It's not unexpected and we believe we're in patterns we really reflect the strong patient demand that we've seen. For Cenosi, we did have increased wholesale buying.
We changed our model from a title model to the traditional 3PL model. Title model was, as it relates to, as we launched and ensuring that we get licenses in every state, we changed to a traditional 3PL model now and reduced the, essentially, the, the, the middleman distributor so we will see an inventory reduction in the channel, which will impact Q1.
can do differently from the predecessor company, the control diassa, in terms of driving and inflection in volumes. And it is the focus going to be more on OSA versus narcolepsy. And just give us a sense of what you're prioritizing and how you believe the commercial landscape.
for synosy might prove to be different over time to the extent it is at all. So that's number one and then number two on avelety how should we think about eventual expansion of
the sales organization to the extent you need to and just talk about how that's going to evolve over time as a product gets more into its commercial life. Thank you. Yeah, I'll take those. So first of all, I'll start with the note.
How do we think we'll have an inflection point with this relaunch that we've talked about? You know, JAS laid a really strong foundation for the launch, for the initial launch. The important thing to remember about the initial launch with JAS was that they launched about three months prior to the COVID shutdown.
And so the initial launch was heavily impacted for the majority of the first 18 months of the launch for that product.
What we believe we are doing right now that will help provide an inflection point is that we've gotten really hyper-focused on the highest potential prescribers. Our plan is to make sure that with our differentiated clinical profile that...
those five subscribers, that we penetrate those five subscribers and then start to expand out in terms of targets. Doing that will help us gain market share very quickly as we really get sophisticated on the approach.
In terms of OSA versus narcolepsy, OSA has a prevalence of about 22 million patients and narcolepsy is 200,000. So that stark difference right there tells you that a much larger opportunity is in OSA. We will right now continue to focus on OSA, but we're not letting our foot off the gas on narcolepsy. So compare still.
a lot of room for growth there as well. In terms of ability in the expanded sales organization, right now we have about 165, five reps going on 25,000 HCPs. We are very, very confident in using our DCC approach to make sure that our reps are able to have the tools that they need to make.
effective call and be very efficient about doing it. And because of that, we are very focused on making sure that penetration and those original target list, which are the highest potential prescribers in the MDD space, is really high before we comment any more.
and further on any additional plans. Okay, helpful, thank you. Our next question is from the line of June Lee with Chua Securities. I'll ask you a few questions.
Thanks for taking our questions and for the updates. In the press release you mentioned potential for up to four NDAs over the next 12 to 18 months. I'm assuming that it also includes narcolepsy and if so, is SIFNI and the Phase II sufficient to file? And have a follow-up. Thank you. Great.
So, thank you for the question. Yes, we will leave that simply and face to trial would be sufficient to file simply as the father of state.
Right, and regarding the Tsunami deal, at a high level it looks like you were able to monetize the European rights at a very attractive valuation, possibly more than what you had got for a giveaway for the worldwide rights. What do you think changed that allowed you to extract such value? Well, I think that...
We've always felt strongly about the potential for Synozie and the overall value of the product. This transaction, the XUS licensing, it reflects the value of the product. So it's consistent with our perspective, what our perspective has always been, and what we communicated with the potential of the product. Our next question is from the line of Joseph Stone
Next steps here, and how does the company think about that and I'll have a more great quick follow-up. Thanks Yes, hi just Thanks for the question on the cutoff date. That would be as of the last reporting week, which is February 17 And then you cut out there for the second part of the question
Yeah, so just in terms of we saw the ANDA submission from TEVA challenging those 2040 patents. So what are sort of the next steps?
in terms of litigation or in terms of potential settlement and maybe you could just comment on your confidence in the strength of the 2040 and the 2034 patents for ability Hi, I'm The company's general counsel So previously announced earlier this month we did receive a paragraph of for notice from have a relating to ability
The receipt of the letter was normal, it was an expected part of the Hatch-Claxman process. And to get to your question, it's no way indicative of the quality of our IP portfolio, which we're extremely proud of. Under the Hatch-Claxman Act, we have 45 days to file a lawsuit against TEVA if we wish to invoke the 30-month regulatory stay. And we're carefully analyzing TEVA's Paragraph 4 notice right now, and we're carefully evaluating our next steps. cold.
I'm not able to provide much additional commentary regarding the notice or the steps you made to get a light of the pencil for future leads legal proceedings. Great. Thank you. And then just really quickly, I know you mentioned that the Fernark-Lupsey, the phase two and the phase three would be sufficient on an efficacy standpoint. Would you need an additional open-able safety experience or will you have that necessary exposure once this trial reads out? But we generally would be able to see the exception for our own goal.
So that safety experience would be part of the filing. As a reminder, in conjunction with our licensing deal with Pfizer, we did get the safety data or the safety experience which is extensive with the molecule. That will also be part of our filing, should we have success.
So that safety experience will be part of the filing. As a reminder, in conjunction with our licensing deal with Pfizer, we did get the safety data, or the safety experience, which is extensive with the molecule. That will also be part of the filing, should we have success. Great, thank you very much.
Our next question is from the line of David Hwang with SBMC. Please proceed with your questions. Hey, good morning. Thanks for the update and for putting me into the Q&A. I just had a quick question on gross to net for ovelity in coming quarters. Can you give us any sense of how quickly we should expect the GTN to improve over time and would improvement correlate with the rate at which you can establish favorable coverage at major health insurance plans? I know you mentioned six to nine months window for that to generally take place. Is that fair to assume GTN should also improve over that time? Yes, David. Thanks Nick. I think that's the guidance that we previously gave.
on for Yotten, just a few from us. On AXS-12, can you just provide a little bit more detail on the timing of those data this year and what you would need to see to give you confidence moving forward, especially with comparison to Cinosi? And then just a quick follow-up on the Ovelity inventory, how much of that 5.2 in reported revenue for the quarter was due to channel stocking? Thanks. Yeah, you wanna take the last question? Yeah, I haven't quantified the actual, um...
the actual, not related to specifically the inventory, but as I mentioned earlier on the question, it was roughly two and a half weeks of future demand. So you can kind of ballpark what that is. That two and a half weeks, we do take GTN deductions on that. So even though it hasn't been sold, it's been sold to our distributor, it hasn't been sold to channels, so we are accruing based on.
the proceeds or will we expect January's GTN would fall out of it. And with regards to timing for OASIS 12.
we expect to have results from that trial in the first half of this year. So that's what I assume, I think you can figure out what the first half is, so that would mean through the end of June . And in terms of what we want to see, we want to see a positive trial. And.
is the placebo withdrawal study. So I just want to see a harder problem. It gives two studies that demonstrate the efficacy of the product. And with regards to the comparison to the testing of the analysis, the indications are different. So no, we didn't prove the tree to pick up at the end times the conditions with narcolepsy. And as is 12, we're studying the water treatment of the caraplexine in my patients' anal coulapsu. And Eddie, I could just add, Eric, you know, mind just to help provide context there. For narcolepsy patients, 100% of all narcolepsy patients serve with their pregnant type FDA time. Selethi-nice?
It's only estimated that about 70% suffer from catalysis. I just want to give you context in terms of the difference in patients. Got it. Thank you so much. Our next question comes from the line of Greg, Savannah, and Jana with Mizzou Hoe Securities. Please just share with your questions. Does the COVID-19 virus sometimes implyanges conflict with water and... May I ask the question first, does the COVID-19 Shelley virus implyHigh? It's the same article. Hopefully it's not some uninhabited matter in the O around public. But I think it does indicate some concern with what about Peteringing — the particular incident that happened during happenings with the COVID
Thanks so much for taking my question. Congrats on the quarter and the year. Maybe my question is a bit bigger picture in perspective as it relates to your marketed products and Ovelity and Synosy. I know you've just launched Ovelity and you've just gotten your hands on Synosy, but do you have a sense of at what point you as a company might be in a position to provide financial guidance around what you see for sales for each of those products and maybe even from a bigger picture perspective?
financial guidance on forward looking sales in any particular year for this is a situation where perhaps maybe three years down the line or two years just how you're thinking about what might be possible.
Yeah, I would say obviously the way you preface your question originally is, you know, we're in a very early stages of probability as well as some OC. You know, so we haven't discussed when we would potentially give sales guidance as it relates to both products. One would surmise though with Snoke being a somewhat more mature product that we would be able to give some guidance on that product first. That's the point.
ability we're looking at you know various models here and and with fluctuate, you know drastically so we're You know it would be further along. I can't engage to the timing when we would give when we give sales guys You know what we did The second part of your question you have talked about the sales potentials the diesel potentials for both S together anotherés porks
Synose. Starting with the Synose, just in the current indication we expect the product, we believe that the product for ATP sells $300 to $500 million. And we also said that we believe that the product has a wide cluster potential, a set potential of at least a billion dollars if you take into account potential new indications. And as we discussed, we are about to launch a federal trial in the UK.
And with regards to mortality, we think that ability has billion dollar potential in both MDD individually as well as in Alzheimer's disease agitation individually. MDD based upon the size of that market in terms of the number of patients who have MDD and who are dying most untreated, Alzheimer's disease adaptation.
based upon not just the prevalence of Alzheimer's disease and the percentage of patients who have that mutation, which is about 70%, but also based upon the fact that there's nothing up currently to treat those patients. And then maybe one more follow-up for me.
Just on Cinosi, where the split in its current use is, I believe, 70% in LSA and 30%. Currently in narcolepsy, I'm wondering if, as you look out in the future with your current plans, whether that is a number that will evolve from there or if it'll stay there, and if it does evolve, any sense on which direction it might evolve in terms of that split? Thanks.
Yeah, thanks Greg. I don't think or I don't foresee, especially in this current indication, that that funds evolve much. As I mentioned before, our focus is heavily on OSA, just given the sheer size of the prevalence of that condition. But we're not taking our foot off the gas on narcolepsy because it is a very efficacious product for narcolepsy.
Thank you. Thank you. Next question comes from in line of Burt Haslett with BTIG. Please proceed with your questions. Yes, thank you for taking the question and all the clarifying comments here. My question is on the smoking cessation program. Could you just frame some of the parameters and timings surrounding the phase 2, 3 there, the size of trial, again, timing, endpoints, things like that. And then with regard to the administration dosing of AXS05, would you expect it to be top dosed in similar fashion titration to a top dose as it is in the
MDD and AD agitation, thank you. Thanks for the question with regards to the timing. We do expect to initiate the phase two, three trial in the fourth quarter of this year. The team is working very hard to get that done. And in terms of the design of the trial, this will be a standard power of the trial design. We will have more to say once we launch the trials. As we always do, we'll provide details in terms of the endpoints that we're looking at. But rest assured that the endpoints will be registration endpoints. And we have gotten feedback from the FDA on exactly.
what that would look like and will provide those details and also be launched at 5. And it comes up with those two recommended rules to provide that information once we get into launch of the study. Good, great looking forward to that. Thank you. Thank you. At this time, we have time for to take two more additional questions. The next question comes from Miles Winter with William Blair. Please use your three questions. Thanks for taking the questions. Just wondering how many of what percentage of covered lives are actually represented through the plans that we use that GPO you bought online last month and when you anticipate those plans making those decisions.
Yeah, hi, my mom picked that one. So, you know, as updated in the end of a prayer remarks, it was one of the three GPO's that are currently operating right now. Each of the three have a fairly substantial amount of covered lives and the PBNs and plans that are underneath them. Now, have the ability to access those contracted rates. Once they work through, they're, they're st-
I think, you know, did they guide that they wanted to see an additional placebo-controlled study for AD agitation because they wanted to see additional placebo-controlled efficacy as well as safety data at that time? And has that tone or commentary changed at the current meeting that you just had? Thanks. Sure. Thanks, Miles, for the question.
When we made the decision to initiate the advanced true trial, that was a decision that we made just from a business perspective. And so that was not based upon the environmental feedback from the FDA. However, once we did meet with safety data, in particular, placebo control safety data, as well as a safety database based on ICH guidelines that was information that was provided to us, that will be required for it.
Okay, thank you. Our final question is from the line of Matt Kaplan with Leidenberg-Salman. Please proceed with your question. Hi, this is Raymond from the quarter and thanks for taking our questions. Just a quick one. I wanted to ask about Audelity as a DCC platform. You've had early success with Cinoc and DCC. I'm wondering how DCC in your initial experience has driven sales and any initial learning that you hope to incorporate as the launch progresses. Thanks.
Yeah, hi, thanks for the question. Um, good one.
So I knew as you mentioned we have talked about what we're seeing on Finosi so I won't rehash that And on the Velody we're still very early what we've done is we've established a platform the same platform that Finosi is operating off of We are very confident in our self-force size as well as the tools that we've given us.
how they are helping drive growth that way.
Appreciate that, Colin. Thanks. Thank you. I will now turn the call back to Axiom's CEO for any concluding remarks. Well, thank you again for joining us on the call today. We are proud of the hard work of the Axiom team, which is now resulting in meaningful differences in people's lives.
This is only the start of more great things to come. 2022 is a pivotal year for Axome. We are not the same company we were a year ago, and we won't be the same company next year with all the strategic growth we anticipate. We are in line to report value-riving updates with multiple MD-X state trial candidates and multiple late-stage clinical trials in some of the most challenging to treat CNS disorders in the next 12 to 18 months. For Wilson County, Axome has the potential to have five commercial products in the market by 2025.
and we're hard at work to meet those goals. Thank you. Have a great rest of your day. This will conclude today's conference. Thank you for your participation. You may now disconnect your lines at this time.