Q2 2023 Axsome Therapeutics Inc Earnings Call
Hello, and welcome to the Axon Therapeutics second quarter results conference call and webcast. If anyone should require operator assistance. Please press star zero on your telephone keypad, a question and answer session will follow the formal presentation. You May press star one at any time to be placed in the question queue.
As a reminder, this conference is being recorded.
It's now my pleasure to travel over to Mark Jacobson, Chief operating officer, but excellent Therapeutics. Please go ahead Marc.
Thank you operator, good morning, and thank you all for joining us on today's conference call.
This morning, we issued our earnings press release, providing corporate update and details of the company's financial results for the second quarter of 2023.
<unk> crossed the wire a short time ago and is available on our website at AXT com.
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.
To present or report additional data the anticipated conduct and the source of future clinical trials.
Tori plan future research and development plan, our commercial plans regarding pheno, the reality and our other pipeline product revenue projections and possible intended use of cash and investment needs.
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 the forward looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports you are.
Cautioned not to place undue reliance on these forward looking statements, which are made only as of today's date.
The company disclaims any obligation to update such statements Joy.
Joining me on the call today are Doctor area to Buteau, Chief Executive Officer, Nick Veasey, Chief Financial Officer, and Lorie, and Bill Burke Executive Vice President of commercial and business development.
Carol will provide an overview of the company and progress made in the second quarter of 2023 as well as key upcoming milestones following area. Nick will review our financial results, then Lori will provide a commercial update.
We'll then open the line for questions questions will be taken in the order. They are received and with that I will turn the call over to Ariel.
Thank you Mark good morning, everyone and thank you for joining axon Therapeutics second quarter 2023 financial results and business update conference call.
In the second quarter, we continued to execute across all areas of our business we.
We drove continued success in the commercialization of mobility and Sanofi.
Dance that we're in late stage product pipeline and further solidified our financial foundation through a public equity offering that provided us significant operational flexibility and strength.
Total net product sales in the quarter were $46 7 million driven by strong performances from both mobility and Sanofi.
Based on the growing ability prescription trends to date and positive feedback from clinicians we are increasing your ability field force by nearly 100 representatives.
In conjunction with our digital centric commercialization or D. C platform. The expansion should nearly double the number of prescribers, we are able to reach.
Later in the call Lorie will comment further when our commercial performance and Nick will provide additional details on our financials.
In conjunction with the commercial performance our first in class development pipeline continues to expand and advance.
With respect to soul remember call, our dopamine and norepinephrine reuptake inhibitor in Taiwan agonist.
We recently initiated a focused phase III trial in ADHD.
Today, we are pleased to announce the launch of two new high value potential indications for solar Amphenol.
Binge eating disorder, and excessive sleepiness associated with shift work disorder.
Binge eating disorder is the most common eating disorder affecting approximately two 8% of U S. Adults.
There is currently only one FDA approved product for this indication.
We recently received a positive pre IMD meeting feedback from the FDA for this program and are preparing to initiate a phase III trial in patients with binge eating disorder before the end of this year.
Turning to shift work disorder, and estimated nearly one third of Americans perform shift work.
Who tend to 43% are diagnosed with shift work disorder.
There are currently only two FDA approved products for the treatment of excessive sleepiness associated with the shift work disorder.
We also recently received positive pre IMD meeting feedback from the FDA for this program and are preparing to initiate a phase III trial in shift work disorder in the first quarter of 2024.
The target indications of ADHD.
Binge eating disorder and shift work disorder have the potential to dramatically increase the number of patients.
So tal could help if successful in clinical testing further growing our already first in class CNS pipeline.
Stay tuned for more updates on these programs and the rest of our leading late stage CNS pipeline.
We are excited by the number of value, creating opportunities that lie ahead of us we anticipate completion of the phase three symphony trial of excess 12 for the treatment of narcolepsy in the fourth quarter of this year.
We continue to see steady enrollment in the phase three advanced two trial of excess one five for the treatment of all timers disease agitation and.
And we remain on track to complete advanced two in the first half 2024.
We are making progress towards initiating the planned phase two three trial of access so five in smoking cessation.
Which is scheduled to start in the fourth quarter of this year or the first quarter of 2024.
Yeah.
Additionally, the team is nearing finalization of the work for the Resubmission of the NDA for access so seven in migraine.
This work has moved at a slower pace than anticipated and as a result, we now expect to resubmit the NDA in the first half of 2024.
With respect to the planned NDA submission for excess 14 for the management of Fibromyalgia, we are making good progress and are working to finalize the content and datasets that will complete the submission.
Well, you're tracking to an NDA submission in the fourth quarter of this year to the first quarter of next year.
Each of these potential milestones builds value for all stakeholders and we continue to make strategic decisions to maximize the potential for future growth.
Lastly, we recently closed an underwritten public offering of common stock that resulted in $258 $8 million in gross proceeds fortifying, our financial foundation, and providing additional flexibility to execute on multiple fronts.
Not only expanded commercial activities by strategically expanding our field force.
But also by adding the aforementioned new indications for salt ramp at all.
That may serve to maximize the product's potential.
Laurie and Nick will each discuss in further detail, how the financing amplifies our ability to read value across our portfolio.
All in all we expect a productive second half of 2023 that sets us up for multiple milestones over the next 12 months I.
I will now turn the call to Nick who will provide details of our financial performance.
Thank you Ariel and good morning today, I will discuss our second quarter results and provide some financial guidance total revenue in the second quarter of 2023 was $46 $7 million consisting of net sales of our two commercialized products fidelity intimacy and royalty revenue from Sanofi sales into out licensed territories.
Revenue for the comparable period was $8 $8 million comprised of U S. <unk> sales beginning may nine of 2022.
But that will be net sales in the quarter were $27 $6 million.
Representing 76% sequential growth.
There were no net sales and comparable 2022 periods due to the timing of the launch.
Sanofi revenue for the quarter was $19 $1 million U S. Sanofi sales were $17 $8 million International Sanofi revenue was $1 3 million, including approximately 700000 in royalty revenue from Sanofi sales in the out license territories.
<unk> net sales for the comparable period were $8 $8 million consisting of U S sales beginning may nine of 2022.
Cost of revenue was $4 $6 million in the second quarter compared to $1 million in the prior year period.
The increase reflects the higher product volumes for both of that audience and I see in the current year.
Research and development expenses were $26 million in the second quarter versus $15 $8 million for the comparable period in 2020 to the.
The increase was primarily related to higher personnel cost associated with supporting ongoing clinical trials post marketing commitments person as seasonality and noncash stock compensation expense.
Selling general and administrative expenses were $78 $9 million for the second quarter versus $31 $2 million for the comparable period in 2022.
The increase was primarily related to commercial activities for the LD and Sanofi and higher noncash stock compensation expense due to the build out of both commercial teams.
Net loss for the second quarter was $67 $2 million or $1 54 per share versus a net loss of $41 4 million or $1 <unk> per share for the comparable period in 2022.
We ended the quarter with $437 $1 million in cash and cash equivalents compared to $208 million as of the previous year end.
Our second quarter cash balance reflects the net proceeds received from our common stock public offering completed in June .
In connection with its public offering in July of 2023, the underwriters fully exercised their option to purchase an additional 15% of the offering resulting in additional gross proceeds to ask them of $33 $8 million <unk>.
Inclusive of this event the pro forma June 32023, cash balance was $469 million.
I will now turn the call over to Lori, who will provide a commercial update.
Thank you Nick and good morning, everyone.
In the second quarter, both ability and Sanofi delivered strong growth results.
Formality, we are still early in the launch phase and focused on executing our commercial strategy.
But that said early adoption by prescribers is robust and a promising indicator of future success.
Okay.
The nursing the second quarter of 2023.
One full year of Sanofi being commercialized by accident.
We have begun to see the results from the relaunch that's the nice thing, which is resulting in healthy growth quarter over quarter.
We expect a strong performance for both brands to continue in the second half of 2020 three.
The second quarter represents only the second full quarter for validation and we are pleased with the progress we are making with the launch.
Important key indicators of the success of our launch our script growth new patient starts and HCP adoption.
In Q2, approximately 53000 prescriptions were reported causality representing.
Representing a growth of 72% quarter over quarter.
In the second quarter Acp's wrote prescriptions for 17000, new patients.
Bringing the total number of unique patients on a reality to over 38000 at the end of Q2.
This prescription growth came from both an increased depth of prescribing with our early HCP adopters as well as an increased breadth of new prescribers.
In the second quarter, we added approximately 3700, new first time prescribers of ability.
Increasing the cumulative total number of prescribers since launch to over 9700.
About 40% of our initial target universe has retina validate after only two full quarters.
In response to this early success, we are expanding the ability sales force from 162 to 260 specialty account managers.
The expansion is expected to significantly increase our reach from 26000 prescribers to approximately 44000 prescribers, who currently write more than 80% of branded anti depressant prescriptions.
We believe that the expansion will help build on early success and accelerate launch uptake.
With.
Hard to payer coverage.
Currently have coverage established 468% of all covered lives.
In the commercial channel, which is expected to be the primary channel formality coverage is now at 46% of covered lives and we look forward to additional formulary decisions in the coming months.
In the Medicaid and Medicare channels.
Approximately 100% of lives are covered.
Major depressive disorder or N D. D is highly prevalent and a major public health concern on the mental health crisis that the U S is currently facing.
We are proud that ability is providing an important and clinically differentiated therapeutic option for patients living with this chronic and devastating condition.
Turning to Sanofi.
As mentioned previously the second quarter of 2023 months, one full year of Sanofi being commercialized by axon.
In the second quarter, we launched our pulling all day or campaign person messy, which was a complete redesign and updated promotional campaign.
We significantly invested in HCP and DTC directed media with the updated campaign and are seeing immediate results from these promotional efforts.
Total prescriptions for Sanofi in the U S grew 15% year over year, and 8% quarter over quarter with.
With net revenues that exceeded expectations.
Since Q2 of last year, we have added greater than 13000 unique patients.
Which represents an increase of approximately 30% and cumulative unique patients over the past year.
The sales team is working to drive the depth within the current prescriber base and Brett by adding new prescribers.
Since Q2 of last year, we have increased unique new riders up so nicely by 24%.
Payer coverage first and now see remains broad with 95% of commercial lives and 83% of total lives covered.
The growth potential for some notionally in the currently approved indications remains substantial as well as its growth and potential new target indications, such as ADHD binge eating disorder and shift work disorder.
As a reminder, Sanofi is the first and only be in our eye for excessive daytime sleepiness, and obstructive sleep apnea, and narcolepsy and the first and only wake promoting agent proven to improve wakefulness grew nine hours.
I noticed he is the only branded therapy available for patients who suffer from eds in OSA, we expect our increase and enhance promotional and disease education efforts to drive continued growth for the product in 2023.
Q2 of 2023, so the continuation of a strong launch with the reality and the continued execution of our relaunch efforts up so nicely.
Both products are clinically differentiated and address patient populations with high unmet need.
We remain focused on commercial execution and expect continued commercial success for both products in the second half of the year.
I will now turn the call back to Mark to lead the Q&A discussion.
Thank you Laurie operator may we please have our.
Questions.
Thank you well now be conducting a question answer session, if you'd like to be placed in the question queue. Please press star one on your telephone keypad you May press star two if you'd like to remove your question from a Q1 moment. Please while we poll for questions. Our first question is coming from Charles Duncan from Cantor Fitzgerald Your line.
It is now live.
Yeah, Hey, good morning area and team. Thanks for taking our questions wanted to first of all start off with a congratulations on the strong revenue performance as well as the broadening our pipeline progress so nice nice quarter.
Uh huh.
Couple of quick questions first of all with regard to.
And approval of our product candidate in postpartum depression, but not major depression depression disorder, I guess I'm wondering if that changes your views on the competitive environment for our ability and you say you can give us.
So what most interests prescribers in its clinical profile avella. These clinical profile and why why their you know really prescribing the drug.
Oh, Thanks Charles for the.
For the question.
What it changes for our business and what we're doing it does not change our plans at all.
As a reminder, major depressive disorder.
And Brett with your 42 million pages out there what we've seen with the launch thus far of ability is the clinical need is really great and we've always anticipated that there would be space for multiple players.
And then.
We said in the past.
So I think that is good.
A lot of different drugs.
These are all for major depressive disorder, because we want to make sure that our future.
Sure.
So therefore passion and.
I know why you're asking.
No.
The sell side.
Life's too.
Likes the big companies against each other.
Needless to say that.
Absolutely.
That other companies you announced his colleagues.
We commend the team for their work to provide a new treatment to patients with postpartum depression.
No further so that developing a new drug in Peru.
Really difficult, especially.
Corridor and dedication passion a lot of talented individuals.
That's what brings us down everyday to work and to that end we.
We're going to continue our work to make sure that we provide new treatments to patients not just with depression, but also with other CNS indications. So if you look at the exposure more pipeline, thus far that you announced today is green.
Total number of patients so that we can help to hundreds of millions of patients in the U S.
That's helpful and if I could ask just one follow up regarding exome Sears there seven or access Theres. There are seven in my Green I'm. Just wondering if you could provide any more color on the work streams required to enable the NDA filing.
And also just remind us on the target product profile that you envision for the candidate that will serve an unmet need in migraine. Thank you.
Hey, Charles This is Mark I'll, Yeah, Hey, Charles This is Mark I'll answer the first question about the work streams for the NDA Resubmission.
So just to be clear. This is just taking longer than expected and it's not as though there were some setbacks.
Last call Thats going on behind the scenes.
We're taking our time to get this right and what it is that we need to get right.
Finishing.
Additional batches that were requested by the FDA as a reminder.
Drug substance and drug product are new manufacturing.
It is.
<unk> RIN stabilised with the buffering system is an accurate innovation. It is the most advanced technology. So in Indianapolis for additional data to support the package that work is underway, it's just taking longer than expected.
I'm confident that we'll be able to get it done.
And then I'll pass one for the <unk> product profile right. Yeah. So just I want to work with.
Final question that you asked Charles and the second part of your first question.
Laurie.
Hi, Yes, so Charles I'll switch back to about and and answered the question on the most put less emphasis that sense, but then I'll also answer the competitive when I saw them Thats helpful.
[laughter], sorry about that what most interesting, but what we're seeing and in the real world.
And I would I would say three things one obviously the rapid onset of action is is really impressive to ACP and we are seeing result, very similar to what we saw in the clinical trials.
The second piece is we are.
Getting to a point now where we have enough patients on therapy by the durability is really starting to come through the sustained effect of the product and so that that's really encouraging out there to physicians.
We are able to to have a very large number of patients achieved remission and that that is something that physicians are commenting on a.
Quite a bit on how fast are not only the symptoms improved but we were able to achieve remission.
Again everything is very similar to what we're seeing in the clinical trials.
What we saw in our clinical trials with mission as early as two weeks.
But then the last thing is it's the side effect profile.
Perfect profile is obviously.
Favorable versus some of the competitors out there and physicians and patients about commenting on them.
In terms of access of seven and you know the day as Mark was mentioning the Mosaiq technology. It really does allow for that very early onset of action for for patients to reduce pain.
Despite the fact that there are multiple entrants in the category right now and a lot of activity and a lot of promotional dollars, even now more than 70% of patients still are dissatisfied with their current therapies. We know they cycle for therapies looking for something that's efficacious.
And so we hope to bring ourselves into market.
As a as an option for them.
Regarding Ovality you pointed out three key differentiations from Sears survey. So thank you for the added color and congrats on the corner.
Thanks Al.
Thank you. Your next question is coming from Rob Civil Roger from H C. Wainwright. Your line is now live.
Thanks, so much for taking my questions and congrats again on the quarter I just wanted to ask a little bit about the kinetics of the sales force expansion for <unk> ER.
Within what timeframe you expect that to be concluded if you expect that new expanded size to effectively be the steady state for the sales force for the foreseeable future or if any further expansion might be on the cards and also if you could perhaps comment on the salesforce composition.
And you know what you see as the facility with which you're going to be able to execute those new hires.
From a pool of candidates who have prior TNF or anti depressant sales experience. Thank you.
Yeah.
Thanks.
Sorry, if I don't get all of them I, just try and write down every question that you asked her if I Miss something please.
Remind me so yeah, we are intending to have the expansion are rolled out and complete it in and ready to perform in Q4, we are very much underway and building and building that expansion right now and have been for or a little bit.
Yeah part of the reason why we think and believe that strongly that the expansion is needed right. Now is we are seeing some early success.
You know we have 10000 ACP writers 40000, new patients are patients on therapy right now.
We're adding about a thousand hep's or more than a thousand hep's every month.
And what we're seeing and why we're so encouraged and obviously field forces them at this stage of launch typically struggle between depth and breadth. We are trying to achieve both and right now you know greater than 40% of our target list has already written and remember our target list is a very.
Target list.
With a very small sales force.
But also on those 40% that are already written 60% of those writers have found more than two patients already to it to right.
And so that's really encouraged from both the depth and breadth standpoint, and we think that expanded the field force well you know will further accelerate the launch uptake.
In terms of composition pool of candidates you know are our first recruit them I think we had a greater than 90% with with CNS experience more than that looks like experience. We are obviously going to to yes that is our goal for right.
With me as well.
Thank you.
Okay.
Thank you. Your next question today is coming from Joon Lee from <unk> Securities. Your line is now live.
Hey, congrats on the strong quarter and thanks for taking our questions. Any particular reason why suddenly trial and our folks they got pushed out or quarter.
Aspire trial completion, Youre also referring to.
Completion, and data readout or just that trial completion stuff and also similar to Alzheimer's agitation if by.
Completion of trial in first half of next year. We can also expect data in first half of next year. Thank you and I have a quick follow up.
Thanks for the question.
So with regards to work is something we're on track to complete the study and report results out in the.
In the fourth quarter.
And this is a this is not a change from our last update.
The reason for that.
More granularity around the timing.
It's 12 trial is that this is an orphan indication.
Indications there there might be so we try and provide granularity as we get closer.
So we're on track there.
With regards to.
Yeah, I think the nuance is that it.
The prior guidance was completion of enrollment completion.
Completion of this study.
Got it that's really helpful and similarly with Alzheimer's agitation. We can also expect top line data first half I'm not sure.
Or is that just.
And in the us.
Similarly, with the old address disease agitation for the guidance, but probably shouldn't novels incorporates.
Data read out.
Perfect.
Based on your experience with digital centric commercial strategy.
<unk> shipped with Veeva is this something that you may also consider down the road or migraine narcolepsy or etsy.
C or even Alzheimer's thank you.
Yeah.
The.
The rationale behind putting together.
So that we can leverage it for our entire pipeline.
We're very glad that we made that investment and we're looking forward to leveraging it for real.
That pipeline that we haven't released that.
Yeah, Deane I can just add one piece of commentary there you know we are leveraging it for for Sanofi now as well. So it is across both products that we have everything.
Thank you.
Yeah.
Thank you. Your next question today is coming from Jason Goldberg from Bank of America. Your line is now live.
Oh, Hey, guys. Thanks for taking my question I, just wanted to come back to the sales force.
So.
I guess, well these new reps to be covering physicians or providers that were not being caught on on prior I'm just trying to get a sense of and I think in the past. The digital strategy was was sort of like I thought meant to improve breadth and productivity of each prescriber, but there's also maybe our rep. That's calling on that provider. So it is.
Kind of wondering like what what's changed are you now in terms of how you leverage kind of the the digital component and more the new rep will specifically be kept adding value.
Yeah. Thanks, Jason So I'll answer that question kind of in reverse so you know or do you think the platform you know what you know part of our D. C. C platform is how I feel of the site.
As well as structured and it wasn't occasionally structure, so that we could maintain share of voice reach.
Yes through Omnichannel measures as well as face to face them and or remote engagement with ACP by by reps.
At the same rate at Salesforce is two times our size. So that's why we you know the DTC platform is so instrumental in how we how we reached a T P. In.
In terms of the expansion of target.
We originally were calling on about 26000 HCP prescribers.
[noise] prescribers and we are now taking that up to 44000 prescribers and I Wanna made me.
When that magnitude is so important and going up to 44000 is they cover 90% of the branded therapies that not only do they cover 90% of prescribing of antidepressant they cover almost.
90%.
New branded therapy. So there are the ones that are writing. These are the M. C piece of 44000 on the ACP set of writing.
And finding new patients to set brand out there.
This is.
Very large expansion of a target list. So it will be current targets and then in addition to growing up to 24000.
And if I can just ask a follow up so the under the older I guess approach with with fewer reps you don't adjust those added 20000 providers you would've just.
Not caught on those physicians or just sort of tried to utilize digital means to to get to those providers.
That's right it doesn't mean, it won't being touched or engagement. They were just didn't get it touched or engage went through their digital our media efforts. Our non personal promotion efforts now we are having breadth individually calling them to detail the product.
Got it got it thank you.
Yeah.
Thank you next question today is coming from David <unk> from Piper Sandler Your line is now live.
Hey, Thanks, So just a couple so first on Sanofi.
So you you have a pea for filing no surprise, there, but I guess the question here is you know with all the label expansion opportunities that you're pursuing how are you thinking about exclusivity runway for the product I know, there's a lot of patents in the Orange book, but what have you been assuming I guess internally.
And what I'm kind of exclusivity runway you think youll have for the underlying molecule. So that's number one and then just going back to the the sales forces are you thinking about sorry amphenol in ADHD.
In particular, what's the extent to which you're going to need further head count say and Pete in adolescence psychiatry setting in.
In the pediatrician settings.
And I.
I guess the broader question is how do you think about leveraging the head count you're going to have in place with respect to.
Solar amphenol thanks.
Sure.
So just a lot of questions there with regards to the label expansion and how we think about the exclusivity runway.
So even with the current the issued patents we have exclusivity.
Running out to at least one.
2000, and 40040 and then in addition to that were.
We also have recently issued recently allowed claims which go out to December 2022, and those cover.
Or.
New indications that would be December 2040, I'm, sorry December 'twenty two.
At December 31, two so that's what was that.
Longer.
So when you run right into that covers all of the.
Additional indications.
And then with regards to the additional head count.
One of the things that we liked them out for sure.
Laurie just to maybe provide a little more color, but one of the things that we do like is the overlap.
And in the uppers and leverage with regards to our current Neuropsychiatrist salesforce like HD is treated primarily by the hypersonic fits in very nicely with.
Our current Salesforce and Salesforce expansion, yeah, perfect I don't know that I can add much more other than you know, it's a bit early to talk about size and what that looks like because a lot of factors obviously come into play when you're thinking about what that overlap looks like at the time and that is you know how long.
Entrenched we are with visibility.
That current sales force efficiency looks like and whatnot. So we definitely like the overlap obviously, it's a very strategic thought from our standpoint in terms of how we how we structure. The sales force, we always seek to be efficient and effective and then it will be a consideration.
When it comes time to decide that that's worse.
Okay. Thank you.
Thank you. Your next question today is coming from Vikram <unk> from Morgan Stanley .
Stanley Your line is now live.
Hi, good morning, Thanks for taking our questions. So just two for us on mobility.
First could you provide some additional color on the profile of patients receiving the drug in terms of prior treatment status.
And prior line of therapy, and how this has been evolving over the past couple of months and then secondly.
Could you remind us your latest thinking on ex U S plans for commercialization.
I believe in the past you might have mentioned this is something you could evaluate a partnership for so I just wanted to see if that's still your current thinking and if so how those are internal discussions are going thanks.
Well thanks for the question. So I'll answer the last question. The second question on the military are rewarded to answer the question on the fever profile. So ex U S plans. So we've always.
We've always said that we would look to out license the product ex U S and so that those plans on that strategic direction has not changed.
Oh boy.
Yeah, I think they got though you know in the very early days of launch we were of course getting that later line patients just based on on mostly due to the unmet need in anyway.
New therapies coming to market, especially one with a novel mechanism of action, but asking fibers have gained experience with the product and seeing early success and in that patient population. They are starting to move them to use up into earlier line.
Right now there is about 10% to 12% usage in first line therapy, which is really encouraging because that typically means that physicians have seen success in patients that they felt warrants using yeah. The product profile benefits patients as early as first line.
But the majority that we're seeing right. Now is you know it's roughly around 60% of patients that were getting have failed either one or two prior therapies.
As you know as clinicians get more experience with the ability and again there are only we are only two full quarters into launch that as clinicians get more experience with ability and our access of off we do expect it to be prescribed to people earlier in their treatment algorithm.
Got it thank you.
Thank you next question today is coming from your teams from Asia from Guggenheim Partners. Your line is that right.
Hey, guys. Thank you for taking my question I'm, just real quick ones.
We got to the narcolepsy can you maybe just talk about hitting on the cognition endpoint there like what do you need to show is that important.
Maybe the benefit of showing cataplexy and just trying to understand what exactly expectation would be.
And then quickly if you can just let us know what the gross to net I missed it if you said it what the gross to net was and maybe what the inventories in the channel Photobiotic. Thanks.
Okay.
Thanks for the questions with regards to excess 12 conflicts.
One of the trial.
We are also looking at other endpoints as Fluidly as you know the endpoints.
That are looked at in the phase two concert study one of those was a cognition as you mentioned, so you need to demonstrate a reduction or improvement in the ability to concentrate in.
In that trial. So that's that's exploratory honestly, but it's something that we're definitely looking at.
Because.
Cognition cognitive difficulties. It is one of them got system before but one of the symptoms experienced by the majority of patients with <unk>.
Narcolepsy.
Hi, Adam this is Nick as it relates to the gross to net for ability.
For the quarter it was in the low to mid fifties.
This was an improvement from the upper Fifty's in Q1, mostly due to higher proportion of refills of the scripts, which had a more favorable G. P M.
This is new scripts and I think your second question related to inventory.
It wanted to.
Declared that the performance of our ability was not impacted by changes in the inventory level. As we stated previously normal inventory levels will be and remain around two weeks. So no impacts specifically as it relates to inventory levels.
Okay. Just one quick one on on gross to net do you expect that to I mean, just curious how do you expect that to change over time.
You know once you have sort of full reimbursement I'm, just trying to understand where it should sort of ship out.
Okay.
Thank you thank you Alvin.
We expect to be the GTS for ability to remain in that mid 50 range for the foreseeable future, obviously volatile depending on when payer access comes in and then that offsets the co pay reimbursement so for the foreseeable.
Future, you're expecting that mid 50 range for GTS.
Thank you.
Thank you. Your next question is coming from Marc Goodman from Leerink Partners. Your line is now live.
I think so my taking my question just really on a like for a month can you provide more color on the duration of his back and pursue especially affordability I know you're still in the early stage of launch, but any color would be helpful.
So painful when like the gross nine for Sanofi and inventory changes in the quarter. Thanks.
Yeah. Thanks for the question could you repeat the second part of the question we have no trouble here.
The second part is I'm, just wondering the curse tonight or inventory changes for Sanofi in the quarter.
Okay.
So with regards to the duration of effect mobility, what we saw in the clinical trials.
No clinical trials, where we're six weeks and the primary endpoint was at six months. So we showed early onset of action at one week or two.
Two weeks.
Basically with every time point.
At six weeks and then subsequently in very large follow.
Follow on studies, we've looked at a duration of effect patients were treated out to at.
At least one year and what you saw was that our.
Improvement either increased or was maintained out to at least one year on what we're seeing.
And from actual.
Use of the product in the field for some time now.
Now we have what how many patients are on guard and 45 40000 patients who've been treated with a product if it's still still early but.
The experience and skill.
Concurrent with this.
We're seeing that the patients are.
Therapy at the rates that we would've expected.
Yeah, and as it relates to Sanofi G. T urn it did improve slightly from Q1 typically due to the seasonality impacts for Q2, we were in the low fifties for G. T N and I believe you asked also on inventory as I as I stated on the previous question inventory remains for Sanofi are around that.
Two week level in general.
Got it that's very helpful.
Thank you.
Okay.
Thank you. Your next question is coming from Joseph taught me from TD calendar wise that life.
Hi, there good morning, and thank you for taking my questions. Maybe the first one I think you mentioned a little over 40% of the target writer.
Writers were have already written a prescription.
Prescription for about what do you think maybe great to see the progress with the remaining that have not written any why are they waiting is it really just a lack of you know kind of in person touch points or something else that maybe there's some salesforce can.
Empathize with the product profile and then maybe second is the country everyone that once the drug getting the drug where do we stand with kind of prior authorizations and should that.
Ease over the next couple of quarters. Thank you.
Yeah, Hey, Doug Thanks for the question so all.
Comment.
You know when I launch happens when you typically see is that he has been very early adopters and those early adopters well well right coming straight out of the gate are usually have much informed positions given that ability has a novel mechanism of action those writers who haven't written it.
Certainly isn't due to lack of touch it is what it is you're now moving into a different physician height. They're typically called fast followers are they wait and see how the early adopters and use the product and then they start to adopt that can be achieved through a lot of different means that either salesforce, that's peer to peer speaker programs, which we are investing pretty heavily in media.
So they are being touched them now we're just we're working through and into that natural phase of a launch where where you'd have to educate.
You know the fast followers of the followers that come after your very early adopters.
And obviously as we continue to add HCP that more than a thousand new writers per month, we are seeing them that adoption happened in not that group as well.
In terms of you know patients that want the product we do have a very robust patient support services program anybody's savings for example.
N P. A support for physicians offices that we feel very very confident that that patients who want the product can't can't get the product.
Perfect and then maybe one quick follow up I guess, what are you seeing in terms of response rate based on prior line of therapy. Obviously, we saw that the open label data in and a person unresponsive patients <unk> patients, where you didn't have that phase III that didn't meet the mark and the charity patient population are you seeing strong responses in theory.
Or is there an ideal place to smokers. Thank you.
Yeah. So we looked at this pretty closely and.
In other words, we studied the product in patients with various lines of treatment and so across the entire spectrum from treatment naive patients to patients with.
To meet the criteria for T. R E and you know what we just.
What we saw.
In the past.
Is that.
<unk> performed equally well.
And just as strong responses.
And.
With with.
More naive one line treatment.
We received multiple lines of treatment, so that's really encouraging.
As a reminder.
Data, what we saw the response rate was done.
E E.
Percent plus range in terms of patients who are responding.
Great. Thank you.
Thank you next question is coming from Matt Kaplan from Ladenburg Thalmann. Your line is my life.
Hi, Good morning, guys and congrats on the strong quarter, just wanted to focus a little bit more on the CRC.
So you'll see south of them until expansion into additional indications can you give us some more detail in terms of the.
Positive.
Feedback that you received from the FDA with respect to binge eating disorder and shift work disorder specifically.
How many studies will you need to complete a two file for these indications and yes.
I mean, that's a mix of cost.
Okay.
Thanks, a lot for the questions Matt.
With regards to the FDA feedback that we received as we received feedback on the entire clinical development plan.
In other words.
Plants that used to get the products approved.
<unk> disorder Ruby Tuesday.
His work will eat Wednesday.
Yeah.
And in terms of endpoints and.
40 studies, what what will you be walking again, this won't be telling that.
So typically you know we provide the details on the trial design and <unk>.
The trial once we started the trial so we intend to stay.
Stay tuned and we'll be providing more details on on both of those studies.
Studies, because we do intend to launch from <unk> in.
Very short order. So this order in the fourth quarter and shift work. This work in the first quarter.
And then with respect to the initiation that you for for the Phase III study and the H D.
Can you give us a little bit more detail in terms of the opportunity that you see and now see our south on that at all.
I'm filling in that in that indication.
Yeah. So it's it's a.
It's a very large patient population as you know you know close to you or maybe even.
Even oh rivaling MTB.
So just do something young patients.
Who have E D.
Right now you think about the therapies that ore available maybe fallen to roughly two categories. You know you have the stimulus work.
Would that be a very large effect sizes, but which have these issues with tolerability and scheduling and then and then you have from the <unk>.
Non stimulants.
Which which have.
Lower back sizes. So it remains to be seen obviously, what we'll see with was sold and you have to call. That's why we're conducting the trial, but the indications from what we see with regards to the currently approved indication so excessive daytime sleepiness is that.
They didn't want us exercise.
But the dropdown does that translate to each deal we do that.
It provides significant benefit to patients and fulfill a need right now which is not addressed by current treatments.
Yeah.
Thanks Terry.
Thank you me interest of time, we have time for two more questions. Our next question is coming from breakthrough in Asia from Mizuho Securities. Your line is our lives.
Okay. Thanks for taking my questions. Congrats on the quarter I'm just my first one on the sales force expansion I was curious.
We've seen a flattening of an Rx growth on a four week rolling basis. So I'm just wondering if the sales force expansion was somewhat related to saying that and four does that salesforce expansion is there a contemplation of perhaps down the line additional salesforce ads.
And then just my second question is just on the pipeline updates you know there were a number of shifts in the timing and I'm just trying to get a sense of what your current confidence in the new timelines that were laid out or are there potential uncertainties are swing factors that still exist that could.
Trigger you know additional.
Additional delays specs.
Yeah.
For what.
I'll take the second question.
And Lori will take the first with regards to our pipeline update what we're trying to do it.
Make a.
Decisions that will.
Gary.
Most long term value.
Where we're fortunate to have so many different potential.
Potential clinical programs, which are high value and which are late stage. So a lot of this has to do with one prioritization.
And and.
Two.
The natural uncertainties that that'll occur with enrolling trials and so that's so that that that's what you're seeing so you know we're very.
Happy with where we are with the pipeline capacity, we think that that's the right thing to do.
And also with very low resource through its execution.
So that's.
That's where we are and you know I think on the.
The Grand scheme of things.
He will be shifted within the standards.
You might expect.
With regards to the running any type of business that that involves.
Oh yeah.
Yeah, Hey, Thanks, Greg.
So the the very short answer is it knows what.
What we're seeing in terms of the trend has nothing to do with the need to expand the sales force itself forces purely driven by the fact that we're seeing great adoption.
And in fact uptake by physicians what was it.
And what we believe we're seeing in terms of the flattening is is the trend that that's that's pretty that we've seen basically since March is where I work out to about four weeks and then they pop and right now I think what we're feeling a little bit is the seasonality effect you know antidepressants typically go through I think nowadays back in the summer.
Particularly in Q3, they can you know sometimes drop as much as 10% Q3 versus Q2, so that.
That is likely what we're seeing right now and Ah Ah, but we're very confident in the fact that our sales force will add to that but again the sales force should be up and running in Q4.
Thanks Laurie.
Thank you. Our final question today is coming from Myles Minter from William Blair. Your line is now live.
Ah. Thanks, I'll just keep it to one I think he added 6% of commercial covered lives in the second quarter here, but you're mentioning that paints a meetings are ongoing oh will occur in the next few months, Jeff want a thought as to what proportion of covered lives in the commercial channel that those meetings would be from clients that represents and as you also know.
Golf is still about 90% of a couple of thoughts on the commercial channel that assembly is thanks.
Myles can do you can you maybe repeat the last part of that question, we had a you've made it out a little bit.
Yeah. It was just that Israel golf still too and so we're about 90% of covered lives in the commercial channel that would be similar.
Yeah, So I'll I'll I'll chime in and they start and they might want to add some color around how we're thinking about it from a gross to net standpoint, but you know from from our our standpoint, our goal has always been and discussions with payers to make sure that we ensure that we were cash.
The value of the debt the novelist the innovation that we bring to the market as well as the clinical benefit of that.
Alrighty.
But also we want to make sure that we ensure our path.
To access for patients.
There are now $6 8 million patients who have failed prior therapy and all of those all of those patients are typically.
Taking six to eight weeks to see any kind of response with a with another therapy. So you know the delayed onset of action with current therapies lower emission rate, we believe it validates clinical profile can really bring them.
Value to.
So both payers and two indications so we want to make sure that we're very very careful to capture that value.
Yeah, I think you pretty much set at Laurie abilities, I mean, it's a truly differentiated products.
And we just really wanted to secure meaningful access while maintaining long term value, but pretty much you said everything yeah. The only thing I'll add out Myles is that you know the access that we have contracts with them and the coverage that we have is very favorable.
So you know.
Payors are seeing the value of the product and we wanted to make sure we're being very very cognizant of protecting that long term value of the product.
And then just as the.
Lastly, with an eye right.
We're reporting.
I've covered lives, which is 68%, which is up which is great, but it's a great place to be right now, but also to widen while we can work with.
Real time, what the percentage of covered lives that does not reflect.
Ongoing progress so stay tuned.
Okay. Thanks.
Thank you we reached end of our question and answer session I'd like to turn the floor back over to management for any further or closing comments.
Well. Thank you again for taking the time out of your busy schedules to join US for today's update we are excited to continue building our industry, leading CNS franchise.
The back half of 2023, we anticipate a milestone filled in the next few months with potential clinical trial Readouts Neutrolin infusions and submissions we are committed to ensuring the continued success of the launch of mobility and commercial group puts a mountain.
Fast on our way to achieving our goal of potentially having at least five marketed products by 2045.
Forward to updating you on our progress and milestones throughout the rest of the year have a great breadth of your day.
Thank you that does conclude today's teleconference and webcast you may disconnect. Your lines at this time and have a wonderful day, we thank you for your participation today.
Yeah.