Q1 2024 Axsome Therapeutics Inc Earnings Call
Good morning, and welcome to back from Therapeutics Conference call. Currently all participants are in a listen only mode. Later there'll be a question and answer session and instructions will follow at that time.
If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, today's conference call is being recorded I would now like to turn the conference over to your host Darin <unk>.
Erector of commute corporate communications at <unk> Therapeutics. Please go ahead.
Good morning, and thank you all for joining us on today's conference call. This morning, we issued our earnings press release, providing a corporate update and details of the company's financial results for the first quarter of 2024.
The release crossed the wire a short time ago and is available on our website at OXXO and dotcom.
During today's call, we will be making certain forward looking statements.
Statements may include statements regarding amongst other things the efficacy safety and intended utilization of our investigational agents, our clinical and non clinical plans our play.
Presenting to report additional data the anticipated conduct and the source of future clinical trials regulatory plans future research and development plans commercial plans regarding Sanofi oncology and our other pipeline products revenue protection and possible intended use of cash and investments.
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.
<unk> not to place undue reliance on these forward looking statements, which are only made as of today's date and the company disclaims any obligation to update such statements.
Joining me on the call today are Doctor area to have Utah, Chief Executive Officer, Nick Peasy, Chief Financial Officer, Mark Jacobson, Chief operating officer, and already May sell executive Vice President and head of commercial.
Mario will provide an overview of the company and progress made in the first quarter of 2024 as well as keep coming milestones.
Following area, Nick will review, our financial results and he will provide a commercial update.
We will then open the line for questions questions will be taken in the order they are received.
With that I will turn the call over to area.
Thank you Darren and good morning, everyone and thank you for joining axon Therapeutics first quarter 2024 financial results and business update conference call.
First quarter of 2024 was marked by strong financial performance for our on market products, which are delivering important and differentiated treatment option for patients living with depression, narcolepsy and obstructive sleep apnea.
Total net product revenue in the quarter was $75 million representing year over year growth of approximately 160%.
We will share additional details on our financial and commercial performance later on the call.
We also significantly advanced our innovative neuroscience pipeline in the quarter, including announcing positive top line results for <unk> 12 in narcolepsy advancing.
Seven any excess 14th when NDA submissions initiating pivotal trials in new indications with sole reinstall enhancing and expanding our old language disease agitation program for excess of loss.
We expect to continue the commercial and pipeline momentum in the balance of 2024.
I will now provide a brief update on our industry, leading neuroscience pipeline and expected milestones.
Starting with our two well you'd see sparks.
Stephen for the acute treatment of migraine is on track for an NDA Resubmission this quarter.
Additionally, we are conducting the emerge study.
<unk> phase III single trials evaluating the efficacy and safety of access of seven in adults with a prior inadequate response to oral <unk> inhibitor.
We anticipate top line results from this trial in the second half of 'twenty 'twenty four.
The excess 14th which we are developing for the treatment of fibromyalgia pre submission activities for the NDA for this product.
We continue to target submission later this quarter.
In March we.
Announced that the phase III Symphony trial of <unk> 12 in narcolepsy achieved its primary endpoint and <unk>.
Significantly reduce the frequency of cataplexy attacks I spoke to you a placebo effect.
Well also reduced excessive daytime sleepiness severity improved cognition and reduced overall narcolepsy severity.
Open label Safety extension trial 12 is ongoing with results expected in the fourth quarter of 2024.
We are excited about the potential of eggs is 12 to provide a differentiated treatment option for patients and HCP.
Oh changing condition.
Moving on to the successful path and continue to anticipate completion of the phase III advance two trials in the treatment of all time with disease education in the second half of 'twenty 'twenty four today.
Today, we announced it and launched the <unk> two study.
Double blind placebo controlled randomized withdrawal trial to evaluate the efficacy and safety of access with five in the treatment of all language disease agitation.
This study is similar in design to the comps.
He didn't positive according one trial.
And of course to the clinical development program, which now includes four controled efficacy trials.
Importantly, our core to further increase the robustness of our clinical program and our language disease agitation without impacting our overall development timeline.
Enrollment in a CT tube is very far along and we expect enrollment completion around midyear.
With respect to solve real tall, our dopamine and norepinephrine reuptake inhibitor in Tallinn agonist. In addition to continued commercial performance.
Launched the phase III paradigm trial in major depressive disorder.
Three in each trial contingent disorder in the first quarter.
Results from both trials are expected in 2025.
We are on track to initiate a phase III clinical program and shift work disorder this quarter.
So oriented Tau is also being evaluated in the focused phase III trial in ADHD for which we continue towards Mississippi topline results in the second half of this year.
Overall, our innovative neuroscience portfolio encompasses five late stage patent protected product candidates targeting 10 serious psychiatric and neurologic conditions with substantial market opportunities each product candidates have the potential to transform the treatment landscape for serious and difficult to treat CNS disorders.
With respect more than 150 million people in the U S.
I will now turn the call to Nick who will provide details of our financial performance.
Yes.
Thank you Ariel and good morning today, I'll discuss our first quarter results and provide some financial guidance.
Product revenues were $75 million for the first quarter of 2024. This consisted of net product sales of $74 1 million and royalty revenue of 900000.
Total product revenues for the comparable period in 2023 were $94 6 million, which consisted of net product sales of $28 6 million royalty revenue of $300065 7 million in one time license revenue received from the out licensing of Sanofi in certain ex U S territories.
<unk> net product sales were $53 4 million for the first quarter of 2024, representing a year over year growth of 240%.
<unk> net product sales for the comparable carried were $15 $7 million.
No see net product revenue was $21 6 million for the first quarter of 2024 and consisted of $20 7 million and product sales and 900000 in royalty revenue associated with Sanofi sales in that license territories.
The notes the net product revenue for the comparable period in 2023 was $13 $2 million, consisting of $12 9 million and product sales and 300000, new royalty right now.
Total cost of revenue was $6 3 million for the first quarter of 2020 for total cost of revenue for the comparable period in 23 was $7 6 million, which included $5 million in sono.
No seat licensing transaction fee sharing expense.
Research and development expenses were $36 8 million for the first quarter of 2024 compared to $17 8 million for the comparable period in 2023.
The increase was primarily related to the initiation of the Psoriatic paradigm trial for major depressive disorder, the salary amphenol engage trial for the binge eating disorder.
Advancement of the salary ethical focused trial for ADHD, the ongoing trials of Axa, So five an excess 12.
Manufacturing costs associated with the anticipated NDA for access of seven and access 14 post marketing commitments for both ability and Sanofi and higher personnel costs, including non cash stock based compensation.
Selling general and administrative expenses were $99 million for the first quarter of 2024 compared to $74 2 billion with comparable period in 2023.
The increase was primarily related to commercialization activities for ability and Sanofi, including Salesforce marketing expenses and higher personnel costs related to organizational growth, including noncash stock based compensation.
Net loss for the first quarter of 2024 was $68 4 billion for $1 44 per share compared to a net loss of $11 2 million or <unk> 26 cents per share for the comparable period in 2023.
The net loss in the first quarter of 2024 increased $21 million and noncash charges of which the majority is comprised of noncash stock based compensation expense.
The 2023 comparable period included approximately $62 million in net gain from the Sanofi out licensing.
Do you want it typically has a negative seasonality effect by GTS, which we saw on both of the audience no secrets as the prior quarter.
A L T G T N discount for Q1 was in the low to mid fifties and Sanofi GTA and discount was at the mid fifties.
We ended the first quarter of 2024 with $331 $4 million in cash and cash equivalents compared to $386 $2 billion.
As of year end.
We believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan.
I would now like to turn the call over to Ari, who will provide a commercial update.
Thank you Nick Accidently delivered solid brand performance in the first quarter of 2020 for OLED demand trends in Q1, once again outpaced growth rates for the market and branded competitors with approximately 95000 prescriptions, representing 12% quarter over quarter growth and 206%.
Growth compared to the first quarter of 2023.
Nearly 18000, new patients started our ability in the quarter, bringing the total number of unique patients treated without validate since launch to more than 89000.
Our sales team continues to activate new prescribers at a consistent rate with more than 30, 601st time of LD prescribers in Q1, illustrating strong underlying demand for the product and expanded use among depression treaters in both psychiatry and primary care offices, we're especially proud of this performance in light of.
Seasonal dynamics, which were compounded by the industry wide change healthcare cyber attack.
Payer coverage was stable in Q1, as our ability remains accessible to patients representing approximately 70% of covered lives.
As noted in our press release. This morning, we just contracted with a large group purchasing organization for potential formulary coverage of mobility laying the groundwork for future increases in covered lives.
Pharmacy benefit managers and health plans under this G. P. O are now able to make coverage decisions for our ability based on the contracted terms with disagreement axon is now contracted with two of the three largest G. P OS for potential coverage above <unk>.
We are very pleased with the strong commercial foundation, we have created to support ability performance, including our expanded psychiatry sales team a recently enhanced sales and marketing campaign and expansion of digital capabilities to maximize reach to targeted hcp's.
Of note, we observed an inflection in weekly new patient starts or N. B Rx in March a positive signal about the impact of our optimized commercial footprint and continued adoption of mobility as a go to treatment option for adults with major depressive disorder.
Transitioning now to Sanofi total prescriptions were just over 41000, representing a one 6% decline versus Q4, 2023, and 14% growth versus Q1 2023.
Demand in the first quarter was impacted by typical seasonality in the ABS market as evidenced by the 3% decline observed in the weight promoting agent market this quarter.
Proximately 3700, new patients started sanofi treatment during the quarter, bringing the total number of unique patients treated with Sanofi to approximately 68000 since launch.
And then 400, new writers were activated in Q1, resulting in a total cumulative prescriber base of more than 12600 since launch.
Coverage for Sanofi in Q1 remained 83% of lives covered across channels.
In closing Q1 was a very positive start to 2024 for both ability and Sanofi with leading indicators such as trends with new patient starts and newly activated prescribers reinforcing our confidence that axon would deliver strong commercial performance in our second year as a commercial company.
We continue to receive compelling feedback from health care professionals and patients about the positive impact our products are having in real world settings, and we're proud of vaccines growing reputation as a leader in the CNS space that delivers differentiated and impactful products for serious psychiatric and neurological conditions.
I will now turn the call back to Darrin for Q&A.
Thank you Laurie operator may we please have our first question.
Okay.
Thank you we will now be conducting a question and answer session. If he would like to ask a question. Please press star one on your telephone keypad.
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Our first question comes from Charles Duncan with Cantor Fitzgerald. Please proceed with your question.
Hey, good morning area with <unk>.
Charles Cliff Duncan: Congrats on a great quarter and I appreciate you taking our questions I had a commercial question and then.
Charles Cliff Duncan: One on <unk>.
Charles Cliff Duncan: The pipeline regarding the commercial question I'm not sure if I heard that Ari was speaking fast could you give us a sense of new to brand versus retail rates for <unk>.
<unk>.
Okay.
Yes, Thanks Charles.
Due to brand at the moment.
Accounts for roughly 25% to 30% of weekly prescriptions.
That's a healthy number at the moment, we expect new to brand continued to grow but Trs obviously should outpace just based on.
The existing patient base and the refill rates, which at this point, we feel very comfortable with where we're seeing good adherence and persistency generally.
So hopefully that answers your question, let me know if there are any specific follow ups.
Hey, just a little more color on persistence see I know, it's probably too early but how do you feel about that so far with gabelli.
Yeah, I feel really good and in fact, we recently were engaged with a group of Kols.
To receive feedback and this is anecdotal we don't have specific claims data to prove this out but there they're seeing adherence is roughly twice what we have seen historically with ssris, which bodes very well for brands.
Just showing that the impact of the clinical profile is meaningful for patients and they are sticking with it longer than other other antidepressants from the past.
Okay, and then in terms of development, perhaps for you Ariel.
Can you provide us any information on the percent responder rate at you anticipate out of the first part of the court to study and then a sense of how you feel bricks Pip, Brazil has changed.
The unmet need which anticipated access so five to become frontline or would it.
Guess, what it sequence after breaks Brooks Pierce I'll use in those in those patients.
Yeah.
Got it.
Excellent question.
Charles Cliff Duncan: With regards to the responder rate and according to.
I don't want to misspeak in terms of exact responder rate, but it is <unk>.
Exactly.
We modeled or would be included as an inclusion criteria.
In quarter, one so the studies are.
Very similarly designed and.
And as a reminder, core more trial was able to very effectively to attack a signal.
In terms of Barrick's proposal.
Unmet need we don't view that breakthrough Brazil has changed.
Sure.
An effective long term treatment for this disease agitation so as a reminder.
Ah patients were being treated.
Legal.
Thoroughly.
These are the only anti psychotics breakthroughs will kind of fall into that class.
So.
Don't view.
We don't view the opportunity in simplified is changing materially based upon that approval.
And then in terms of your frontline usage.
Charles Cliff Duncan: Assuming that continue to generate data.
Replicates, what we saw in the first one and also in <unk>.
One we would fully expect fiscal five.
Could it be a frontline treatment and would be a frontline treatment for heart disease agitation.
Yeah.
Speaker Change: Makes sense, thanks for taking my questions.
Yeah.
Speaker Change: Yes.
Our next question comes from landed to Michelle with RBC capital markets. Please proceed with your question.
Hey, guys, congrats on a quarter to quarter and thanks for taking my question can you guys talk about the price volume impact you'd expect from this latest G. P O add.
We expect some acceleration scripts with an impact of gross to net.
Near term or would it be more incremental gradual change and then maybe just related to that.
With two out of the three major GPO is in hand can you talk about maybe the progress with the third thank you Amanda.
Yes. Thanks, Duane this is ari.
So regarding price volume trade off it's a little premature to talk about impact on gross to net for this particular agreement and obviously part of the effort right now is two <unk>.
Ensured that we're effectively pulling through the contract terms with the pbms that are underneath the GPO umbrella.
But we do expect there to be volume growth. Once we are able to expand coverage and will provide updates on the impact of the gross to net.
When appropriate rigor.
Regarding your question around the third GPO, what I'd say is where we're having very fruitful discussions with all of the major payers and pbms, including the <unk> and these are complicated negotiations obviously, it's important for us not only to expand coverage, but also be mindful.
All of our profitability over the long term.
Speaker Change: Because we have a growing portfolio that we need to plan for so no specifics on the details of the negotiation, but we feel very good about the nature of the dialogue.
And look forward to future updates.
Thanks.
Our next question comes from Ash Birla with UBS. Please proceed with your question.
Hi, Thanks, Thanks for taking our questions. Congrats on the progress. So I had two one was just just on this last comment that you had about the U P. OLED can you maybe elaborate like what percentage of commercial lives covered through the CPU you have 48% coverage.
Prior to this I believe and then second regarding this new study for 80 agitation a.
Can you remind us like.
Is that something that you need a photo regulatory package or do you think that would be advanced to study would be sufficient like why why do this study now versus you already have a study going on and you had a successful randomized withdrawal study earlier. So just wanted to get your thoughts on that thanks.
Sure. Thanks for the question. So two questions there I'll take the last one and then I'll turn it over.
The first question so with regard to the court to trial no. We do not need it for a regulatory submission. This is an opportunity for us to increase the robustness of the program while also not affecting at all timing.
Admission so.
It just makes sense, we want to have the most.
Robust package, the strongest package going into an NDA review.
This is such an important indication.
Always helpful to generate additional data, which may also.
So not just in terms of a regulatory submission, but also in terms of future publications useful from a commercial perspective.
So.
We think it was the right thing to do it's very efficient and allows us to leverage the large number of patients who are experiencing stable responses and the current open label safety extension trial.
Yeah.
This is Ari your question around percent of lives with new GPO, obviously as you know the GPO represents a pool of Pbms and so.
Because we each of the Pbms as a different number of lives covered.
Has the ability to make their own coverage decisions.
I can't give you a specific number of the incremental percentage of lives covered.
But it is meaningfully above the 48% that we have publicly stated today and so part of our focus.
Moving forward is to ensure that the majority of the pbms underneath those GPO or accessing the rates that we've agreed to so it is a meaningful percentage increase if we were successful with all of the pbms underneath the umbrella.
Our next question comes from Ram.
Sales of Sharon with H C. Wainwright. Please proceed with your question.
Thanks, so much for taking my questions.
Just very quickly on the commercial front I was wondering if there are specific factors that you expect to impact discussions with the third of the three largest G. P. OS that you are currently looking to secure.
Contracting for our ability with and if so what those factors might be and then on the development side I was wondering area. Maybe if you could comment on the profile of a excess 12 relative to the existing approved marketed agents.
And whether you believe the impact on cataplexy is likely to be the most significant selling point and if you anticipate that the impact on sleepiness is going to be sufficient for excess 12 to be positioned commercially in a competitive way into syndication.
Yeah.
Sure I'll start with the first question. So factors that impact negotiations generally speaking are the demand growth that were.
Driving in the marketplace and in fact all of the.
Recent access discussions we've had really focus on how quickly the brand is growing.
And so the best way to secure access to the show.
<unk> growth in the absence of formal coverage I think it's important to note that.
As a rule and while we negotiate for coverage with major plans and Pbms one of the areas of focus has been to optimize our patient savings and reimbursement support services to support continued demand growth within the existing access paradigm and our ability to drive growth is the primary factor in it.
In driving interest with GPO and major plans and Pbms and so we're really proud of the growth that we've seen to start off the year.
I mentioned on my opening comments that we've seen about a 30% increase in weekly new patient starts March compared to December and Thats with the existing access we have so that only strengthens our ability to negotiate and ultimately have meaningful discussions with the insurance companies.
Speaker Change: Have you started reviewing DTC promotion of our ability and if so to what extent.
Speaker Change: Well, we have DTC largely in the digital space at the moment, we do not currently have a TV or a video AD that's running but that is something that is under consideration at the moment and we will share updates when appropriate.
Great. Thanks, So Ron.
With regards to your question on asset quality and the profile. So what we saw in <unk>.
Trial.
Replication of what we saw.
In the concert study.
Important insignificant impact on complexity, so not only was there a large percent of reduction in complexity, but we looked at.
Speaker Change: Remissions Cataplexy, which is total elimination.
The results were very strong so a third of the patients had 100% reduction cataplexy attacks versus less than 10% of patients in the dose.
Steve Herbert.
And we also did see.
And in fact, an acceptable currency severity as well as the cognition. So we like the profile and the profile as it relates to Egypt.
Agents that are currently on the market is incredibly favorable.
No that has been on the market not all patients in fact, the minority of patients that can tolerate them. So there is a significant unmet need.
Speaker Change: We did conduct it.
Also a very large pizza survey of <unk> patients.
In conjunction with delinquency network.
And what they showed was that even on current treatments, 77% of patients continue to experience cataplexy.
It relates to your question around whether around yes.
Speaker Change: Generated it.
Enough.
Commissions and pieces to think about without the product.
Yes.
What we saw in the study.
Clear impact or an acceptance at times like this.
And we also saw a clear impact on overall narcolepsy severity, so anchored 12 rigs.
Do that because of the severity.
So improved overall narcolepsy severity as well as quality of life. So the way that we think about it is.
Should this product.
Billable to commission and to patients.
That profile will be.
We will be very apparent.
To get.
It's a patient and clinicians when its accretive based on the patient reported outcomes and Huawei and clinician global impression.
So we really like the profile and.
Speaker Change: We think this will be an important treatment for patients.
Okay.
Speaker Change: Thank you very much.
Okay.
Yeah.
Our next question comes from Marc Goodman with Leerink. Please proceed with your question.
Good morning, Nick can you talk about or was there any inventory for <unk> in the quarter anything unusual there that may have helped sales and second can you talk about gross to net.
Youre thinking about the rest of the year and with these contracts that are not being <unk>.
Speaker Change: Put in place you know how should we be thinking about over the next couple of years and then area could you just talk about.
A D agitation for one second obviously last quarter, you delay up by we're not exactly sure but into the second half the completion of adults to maybe you can just give us a little more color. There like are we or are we now back on track is this going to be something that's going to happen early in the second half of the year.
This late in the second half of the year and just to confirm that this new study that you're talking about here. This is just patients who have already gone through that open label. So it's not really competing against it all right. Thanks.
Hey, Mark it's Nick so for inventory inventory remains in channel at two weeks.
So nothing has changed specifically around inventory for.
<unk> remains continuing at two weeks and then the ability GCN discount for Q1 was in the low to mid fifties.
D G Tem discount was in the mid fifties for the quarter.
As you know Q1, typically does have a seasonality negative seasonality effects on GKN, which we both saw an ability and sanofi versus the prior quarter.
For a valid GTS did fluctuate in Q1 and ended the quarter with March being in the mid fifties and right now we have no reason to expect it to vary significantly from that level moving forward.
Great.
And.
Mark as it relates to the pricing round all diamonds the reputation so starting with advanced too.
The guidance is second half of this year, we're very comfortable we remain very comfortable with that guidance based on enrollment trends. So.
What we're seeing is very positive with regards to how that study is proceeding and then as it relates to <unk>.
<unk> is not competing with advanced too.
And you are correct.
You have a large number of patients.
Who are in the open label portion we're experiencing stable responses. So that allows us very efficiently to enroll cohort two.
We do expect that more enrollment and according to the complaint.
To complete mid year and the reason for that.
Confidence around that is the perspective is very far along in terms of time and.
Enrollment.
Speaker Change: So just to understand for advanced to enrollment really picked up over the past three months and that's why you're confident.
So we're confident based on where enrollment was and has been enrollment and Amanda to verso are very far along and it continues to enroll at a predictable base.
Okay. Thanks.
Yeah.
Our next question comes from David M from with Piper Sandler. Please proceed with your question.
Have a couple of questions on the pipeline first.
For Reboxetine.
In narcolepsy can you just remind us.
Of the path forward in other words are you expecting to file <unk>.
After you.
You've completed the the extension or are they are they get out of it.
Are there any other gating items to.
An NDA filing so can you talk about that in your timeline to filing on robot contained in narcolepsy slash cataplexy.
And then so react at all.
Can you talk to your pediatric ADHD study plan.
I believe that's a gating item to a filing.
In ADHD. So it would be helpful to talk to that and then lastly, Astro box Athene in fibromyalgia.
The commercial priority is that and what's the extent to which.
Youre going to need to expand the commercial organization.
Support that product commercially thank you.
Thank you.
Question is on so.
I'll take the first two oriented performance oriented call them at all.
Comment on extra marketing.
So in terms of.
The timing for NDA filing for <unk> 12, so.
The gating factor is completion of the open label safety trial, which we expect to complete in the second half of this year.
And then.
It will take us some time to put together the final.
And without impeding factors so.
It's completed.
Then you're going to file the NDA.
As it relates to two 4 million Vitol and the pediatric ADHD study plan you are correct that that is the trial, which means the corner initially package and.
We've been working on that as you can imagine in terms of the firms speaking with the FDA to get that in place and we have not yet provided precise guidance, but this is a study that we will be targeting to start this year.
And with regards to his philosophy.
Thanks for the question I think for excess 14 in fibromyalgia, we do view this as a meaningful commercial opportunity there are three approved agents.
But theres a lot of room for improvement in terms of overall clinical profile for patients and we feel very optimistic about the profile excess 14 offers for patients.
As it relates to how how it will impact the sort of commercial footprint.
Part of what we're at.
Analyzing this year is how to effectively size and structure, our sales force to accommodate a growing portfolio of products.
Fibromyalgia is not psychiatric product there is a lot of overlapping comorbidity with major depressive disorder that will influence some of our thinking.
And so it's a little too early to say, how many additional reps, we would want to build into the plan or how we would structure. It but we do think that there is a way to promote excess 14 efficiently. While also putting plenty of attention on the other approved products on the market.
That's helpful. Thank you.
Our next question comes from <unk> with Guggenheim Partners. Please proceed with your question.
Hey, guys. Thank you for taking my question I have two quick ones. One is a clarification one it's got to be a cohort study.
So that's a new study industry. The full study within the <unk> umbrella is that a requirement from the FDA that you have to do two randomized withdrawal study and then will the NDA package b.
Contingent upon completion of that study are the outcome of that study and so that's one and then with regard to a reality I mean, very nice corridor, except that uncle Laxer that any any talks on thinking about providing guidance for the product.
Maybe on a quarterly or yearly basis. Thank you.
Yes, yes, sure Hey, Alan Thanks for the questions Nick.
Too early an excellent ability of lifecycle provided sales guidance given the fluid nature of some of the market dynamics and the unpredictability of external factors that could have.
Different impacts we have shared that we believe peak sales for ability and MDT alone are the $1 billion to $3 billion range and Sanofi, 3% to 500 million for its current indications.
Okay.
Yes, and with regards to our core to this is not an FDA requirement.
Or does that increase the robustness of the package.
It is the pivotal trial, so we like that we like having four different studies.
So basically if you think about it.
Advanced one in advance to report two parallel studies in cohort one and according to our two randomized withdrawal study so very nice source of.
Speaker Change: Evidence generation with those four states.
And then with regards to E filing is contingent upon completion of that study because it's not required not really contingent on however.
Do you think that based upon where we are with enrollment of that study we would expect the study to be fully enrolled.
Year end also.
Timing of the relapses that in.
Ward, one trial, which was positive that there is the potential for that study to readout around year end, that's not formal guidance and.
Yeah.
And formal guidance.
The con.
Number of relapses and timing of relapses, but just to give you a sense of how we might think about it. So we're really happy with the way that you're able to efficiently increase the robustness.
The program for this very important product.
Our next question comes from Jason <unk> with Bank of America. Please proceed with your question.
Hey, guys. Thanks for taking my question.
So just on a core too so it sounds like the motivation with the study is that kind of like to think about it it was a marketing study.
And along those lines is there an opportunity for you to pull a cord wanting to such that I don't know if the data is a better chance of getting into the label given that our quarter. One was a really small.
File and then you guys did mentioned the cyber attack in <unk>. So I know some of your peers had kind of indicated it wasn't really an immaterial impact number. So can you quantify to what extent the cyberattack did effect.
<unk> revenues in <unk>. Thanks.
So with regards to <unk> according to <unk>.
Just to be clear and this is.
Can be used for marketing, obviously, but it is a registration trial.
So we like that so it does provide a very objective source of evidence and as it relates to be able to put an important one.
<unk> studied view their assembly design could definitely be combined and Thats typically something that is done in <unk>.
The packages.
Yes, and regarding the change healthcare cyber attack.
The impact for our ability was really focused on two weeks.
The end of February beginning of March.
Basically what we saw was roughly <unk>.
30% to 40% impact on weekly prescriptions for those couple of weeks.
During that time, we put in a number of technology.
Optimizations and patient savings optimizations.
We saw a very quick bounce back.
In early to mid March.
For our demand trend and it's been stable since then stable to growing since then so it's largely behind us at this point, we don't expect any continue disruption.
And for some brands it was more impactful just related to time and market whether patient savings cards were tied to the change healthcare switch things of that nature.
So that's why it impacted us, but it was transient in nature, we feel really good about the solutions, we put into place and we've seen really nice growth.
Speaker Change: Yes.
Thank you.
Yeah.
Our next question comes from Joon Lee with Trust Securities. Please proceed with your question.
Okay.
All right.
So that's part of our questions. He brought airports to what's the rationale behind that.
Mike will talk about both.
Thanks, Paul.
Yes.
Mike: Yeah, but it helps us.
And.
Are the endpoints in our core two identical to that news Corp. One. Thank you so much.
Okay.
So thanks, Stephen how are you.
We're somewhat muffled, so I'll try and answer the question the way I interpreted it.
Not necessarily.
I think the question was around <unk> and what was the rationale when it is time.
Versus other designs.
So.
The rationale was.
Wanting to take advantage already.
Practice.
And Ah study, which was treating patients in an open label fashion and therefore would allow.
Assessment of stable response.
It made a lot of sense already since that.
Since our open label safety extension trial is essentially the same way that all randomized withdrawal study.
So that was the rationale there and in terms of the endpoint.
As compared to award and won the endpoint is identical. So this is.
This is a way for us to be able to take the learnings from one and apply them to according to to generate additional data.
Okay cool.
Yes.
Our next question comes from Joel Beatty with Baird. Please proceed with your question.
Alright, thanks for taking the questions first one is on ability to provide a breakdown between usage in earlier line and later line therapy.
The second large proceed contract.
Usage in earlier lines of therapy be impacted at all.
Okay.
Ari: Yeah, Hey, this is ari thanks for the question.
We have seen a really nice increase since last quarter in line of therapy.
The increases we saw roughly 5% increase in first or second line use though.
At this point, we're around 50% of all the early prescriptions are first or second line, which is a very healthy trend and we expect that to continue.
Your question around the GPO contract and the impact of line of therapy generally speaking when we negotiate with plans and Pbms. We are negotiating for first or second line access for patients and so we would expect.
If we're successful in pulling through that comp those contract terms that would further increase the earlier usage of mobility.
In patients.
Thanks, and then last question yesterday Friday, any kind of context on how the spending trajectory is looking going forward.
I'm sorry, you were hard to hear do you mind repeating the question.
Sure how does this spending trajectory look going forward, just spending overall for R&D and SG&A and so on.
Oh.
Got it. Thanks. Thanks for your question so as R&D expense for the quarter was $37 million, which ticked up slightly from the previous quarter, we expect R&D spend to continue to increase gradually.
We saw.
So we havent both phase III trials commence during the quarter with the third starting in Q2 and shift work.
These will be partially offset by the completion of the Symphony trial for <unk> 12, and as a reminder, in Q2, we do plan to submit the NDA for fibromyalgia. So we will have a onetime charge for the NDA filing fee.
As for SG&A total expense for the quarter was $99 million as I mentioned in my opening remarks.
That was higher than the previous quarter, but anticipated as it really related to the sales force expansion.
We would anticipate SG&A expense to be in this range in future quarters.
Thank you.
Okay.
Our next question comes from David <unk>.
Citi. Please proceed with your question.
Hi, good morning, and thanks for taking my question and congrats on the quarter I wanted to ask about the impact of the GPO negotiations in terms of timing on them.
David: Do you have any increases in the number.
Commercial covered lives just.
What could the cadence in covered lives that you pick up look like and can we look towards next quarter as you know.
David: Potentially seeing a meaningful step up in the number of covered lives.
Thanks for the question, David So we expect coverage to increase but it is difficult to predict the exact timing.
Do you think about Gpus are effectively gatekeepers for Pbms, which is one of the first step towards securing access is agreeing on contract terms, which include the rebase and utilization management parameters and semi agreement, we announced today enables the PPA pbms under that umbrella. So now access to the contrary contracted rates for their members.
I can't provide a specific percentage increase in covered lives from the 48% we have today, but I will say that depending on how many of the pbms underneath that umbrella access the rate. It is a meaningful increase over and above the 48% at the timing is just its too difficult too.
To provide in your question about next quarter, obviously, our intent is to try to improve it as quickly as possible and mill will provide updates at the appropriate time.
Our next question comes from Greg <unk>.
Yeah.
Please proceed with your question.
David: Hi, This is a bump for Greg I, just had a question about excess supply.
Have you thought more about the branding for access so five in Etfs tuition and if you keep it under the <unk> brand, thanks, and congrats on the quarter.
Thanks, Thanks for the question.
So.
Whenever you have a.
A new indication.
Especially one which is different.
As it is.
David: In the case of <unk>.
And so five four months.
And that patient versus major depressive disorder that is always a consideration and its one that requires a lot of good thought and.
It's not just making just the answer on the fly. So this would require us to really think about it and do some quantitative work.
So stay tuned.
The minute that we would not.
Asleep communicate or announce ahead of time, but it's something that we're working on or anything you would add to that no I think youre spot on and I think the reality is that their advantages and disadvantages to either maintaining the same name.
We're having an alternative brand name and we're going through the work right now in anticipation of a filing down the road.
Great. Thank you.
David: Our next question comes from Vikram <unk> with Morgan Stanley. Please proceed with your question.
Yes.
Hi, good morning, Thanks for taking our questions. We had two one on ability one on the pipeline. So for mobility could you talk a bit more about how you expect the sales force expansion that you've completed recently to help kind of inflect scripts and inflect sales throughout the.
The rest of the year and whether you would expect.
David: There to be kind of a visible kind of acute lifting in either of those metrics over the next couple of quarters and then secondly.
Four so I'll reemphasize in ADHD.
Can you confirm is this phase III readout expected in the second half of the year is this going to be the study based on which you can see.
Submit potentially a filing for the indication and then also if you could just kind of frame out for us.
And what you'll be reporting and why you would think constitutes a successful readout here that'd be helpful. Thank you.
Okay.
Sure, Yes, I'll start with the ability question. So our sales force expansion and we are seeing an impact.
Certainly on activity levels in an effort with customers we're seeing.
Roughly 40% increase in weekly calls to customers.
We are engaging with a broader group of providers that includes our primary care audience and we are seeing that a meaningful increase in new prescriptions and total prescriptions from primary care, which is sort of commensurate with the additional focus and we've been able to provide with the expanded sales team.
David: I would say that we're in the early phases of seeing the impact from a demand perspective and referenced on the opening comments that we've seen a 30% increase in weekly new patient starts that is typically the first indicator that demand growth.
Is reaching an inflection.
But it's still early days in many ways and we expect that growth to continue over time and so we feel really optimistic about the impact of the sales force expansion has had thus far and expect that to continue to build over the course of the year.
Great.
With regards to solar AMCOL and current ADHD study that phase III trial is registration trial. So this is the study that would enable an NDA filing along with the study in pediatric patients.
We do need to include that data and efficacy data from pediatric patients thats required for any claim that E E filing.
We're looking forward to the results from our focus three trial in the second half of this year. So we're on track for that as it relates to what we're looking for.
The first thing that we're looking for is to demonstrate efficacy.
In the first.
Marge Multicenter randomized parallel group study.
That's what we're looking for the results of that wound.
Informed the profile of the product there had been one prior study with consortium to call in ADHD, which generally sponsor that was an investigator initiated trial that was a single center studies. So this will be the focus in the first multi center trial.
Our next question comes from Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.
Matthew Lee Kaplan: Hey, good morning, guys and.
Matthew Lee Kaplan: Congrats on the quarterly results just a quick follow up on the ADHD program or Salamanca toll.
What are you I guess wait for the readout of the adult study prior to starting the pediatric study in ADHD.
No we would not.
Our goal is to start pediatric study as soon as practicable.
Great. Thanks.
We have time for questions from two more analysts.
Hi, guys. Thanks for taking the questions.
Just on the autonomous assays as Typhoon program nearing rolling from the ARPA liable expansion of.
Advance to in todays call at various studies, so does that really imply that you've already got all of the long term safety data that is required for a potential access there I saw a filing for that indication and then the second one is about the messaging that accord two could be a pivotal study if it is required.
Good.
Why is that the case when I believe a court one went through some protocol amendments and with obviously concluded early in <unk>.
I think the messaging with it that methane pivotal when I first started and it turns out it wasn't I guess what has changed there to say that a qualitative would be pivotal on a cold one watson. Thanks.
Thanks for the questions with regards to what.
Open label extension study.
So.
We continue to.
To enroll the open label safety extension trial as a reminder, that requires and what we're trying to do is to meet Ice's guidelines, which are 300 patients treated for six months.
100 patients treated for one year and well on track to accomplish those goals. So unfortunately did not affect that and then.
Also.
Our patience.
Or completing two also equal to then go on and continue to do so we're very comfortable with regards to <unk>.
The necessary number of patients as it relates to.
Two pivotal study.
And then also as you.
Comparing that to a horn one so what's nice about 1.2, we completed a court one and so all of these learnings in terms of.
In terms of our confidence around endpoint.
Barry in a study like this we have and so we're able to design a court to very prospectively and.
We have also received.
Feedback from the FDA that this could be a registration trial based on the design so I.
I think that is the fact that.
According to Nord designing and we have designed it with the benefit of the knowledge from our cohort one.
Which is a benefit in this case.
Thanks for the questions.
Our next question comes from Troy Lankford with TD Cowen. Please proceed with your question.
Hi, Congrats on all the progress this quarter and thanks for taking our question on April 14, how confident do you feel that that has all I would need for the from a clinical efficacy perspective to approve the application.
And then on Sanofi can you just provide any additional color around the powering assumptions for the phase III trial and MPD.
Yeah.
Matthew Lee Kaplan: Sure.
Take 14 this is mark so.
We are targeting this quarter here.
In terms of content.
Matthew Lee Kaplan: That's substantially complete so were.
Those things are being finalized and it really is building out the submission.
We're going through that would take the time to get that.
As robust as possible, but the work is substantially.
As it relates to the powering where solar ramp recall at MTV.
We powered study similar to similarly to the way that we powered our other studies in major depressive disorder, so and.
We do have quite a bit of experience there.
<unk> program someone.
So think about the powering is similar and I think in general.
These studies.
The effect sizes, which one would expect with these drugs.
Matthew Lee Kaplan: He is very well laid out and there's a lot of precedent. So that's how we power. The study so to summarize it's 90% power to detect an effect size, which is similar to the effect size, which we detected in like program.
Okay.
Speaker Change: Okay. Thanks for that color.
Since there are no more questions I will now turn the call back over to axon CEO for concluding remarks.
Well. Thank you for taking the time to join us for todays quarterly update the first quarter of 2024 more strong progress racks of them.
Axon CEO: We look to continue our focus on commercial and pipeline execution throughout the balance of the year with.
With a goal of delivering innovation and value to patients health care professionals and investors alike. Thank you and have a great rest of your day.
This concludes today's conference. Thank you for your participation you may disconnect your lines at this time.
Okay.
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