Q3 2024 Axsome Therapeutics Inc Earnings Call

November 12, 2024

Good morning, and welcome to the Axon Therapeutics third quarter 2024 financial results Conference call. At this time, all participants are in a listen only mode.

Later, there will be a question and answer session and instructions will be given at that time. Please note that today's call is being recorded.

I'll now turn the call over to Darren Athletic Director of Corporate Communications. Please go ahead Sir.

Speaker Change: Thank you good morning, everyone and thank you for joining our third quarter 2024 financial results Conference call I'm joined today by a Doctor area Tavita, Chief Executive Officer, Mike <unk>, Chief Financial Officer, Mark Jacobson, Chief operating Officer, and <unk> Chief Commercial officer.

Speaker Change: Earlier. This morning, we posted a new corporate presentation complementing today's call to the investors section of our website.

Speaker Change: And he is joining by webcast may also advanced and supplies at anytime during the discussion.

Speaker Change: As a reminder, we will be making certain forward looking statements regarding among other things the efficacy safety and intended utilization of our investigational agents, our clinical and non clinical plans our plans for central reporting additional data.

Agent conduct and the source of future clinical trials regulatory plans future research and development plans, our commercial claims regarding Sanofi ability and our pipeline products revenue projections and other financial forecasts if any.

Speaker Change: And possible intended use of cash and investments.

Speaker Change: These forward looking statements are based on current information assumptions and expectations of future events and are subject to certain risks and uncertainties that may cause the company's actual performance and results to differ materially from those projected.

Speaker Change: Please refer to today's press release presentation, and our SEC filings for additional details on these important risk factors you are cautioned not to rely on these forward looking statements, which are made only as of today's date and the company disclaims any obligation to update or revise these statements.

Speaker Change: I'll hand, it over to Harry.

Harry: Thank you Dan and good morning, everyone.

Harry: You you for joining us on today's financial results and business update conference call.

Harry: We are focused on developing and delivering novel innovative medicines that can transform the lives of patients living with serious central nervous system conditions.

Harry: We are pleased to report on the progress we've made in advancing this important mission in the quarter.

Harry: Particularly our long term vision and review potential and value driving year, an intermediate term milestones.

Harry: Third quarter was another strong quarter and represented a notable milestone as we delivered quarterly product revenue in excess of $100 million for the first time.

This quarterly performance translates to an annual revenue run rate of approximately $420 million just three quarters into our second full year as a commercial company.

Harry: While this progress is tremendous.

Harry: Even more significant potential growth lies ahead based on our current portfolio of innovative marketing and late stage pipeline candidates.

Harry: In addition to ability and <unk>, our two FDA approved treatment for major depressive disorder, and excessive daytime sleepiness, and narcolepsy and obstructive sleep apnea, respectively. Our pipelines features five innovative late stage product candidates currently in development nine indications across psychiatry.

Harry: And knowledge.

Harry: Our late stage pipeline positions us to continue to deliver important new medicines and therapeutic areas, but in fact more than 150 million patients in the U S.

If successfully developed this portfolio has the potential to provide almost $16 billion in peak sales.

The diversity and depth of our pipeline also reflects axons differentiated approach to scientific innovation.

Harry: Which we believe aligns with our patient centric mission and.

Harry: An expanse of therapeutic possibilities for CNS conditions.

Harry: Now before turning over to make them already who will provide greater detail on the strong performance in the quarter or Belgium.

Speaker Change: I will provide an update on the pipeline and upcoming milestones.

Speaker Change: A key development in the quarter with the Resubmission of our new drug application for <unk> seven our novel multi mechanistic product candidate for the acute treatment of migraine.

Speaker Change: We submission was acknowledged by the FDA designated as a class two resubmission with Baidu for action goal date on January 31 2025.

Speaker Change: Preparations are underway to ensure timely commercialization if at all.

Crude.

Speaker Change: Our ongoing emerge phase III trial evaluating <unk> in patients with a prior inadequate response to oral <unk> antagonists.

Speaker Change: He is on track to read out in the fourth quarter of this year.

Speaker Change: From this trial will help inform the potential utility of any successful Stephan in different patient subgroups.

Speaker Change: With respect to excess 14th for management and final my Alger.

We're completing preparations for the NDA submission, we expect to submit the NDA to be a D. A.

Speaker Change: Thanks.

Speaker Change: I'd now like to comment on our other late stage pipeline box, starting with the successful path.

Speaker Change: I'm a comprehensive development program for <unk> five in Alzheimers disease agitation consists of four pivotal phase III placebo controlled efficacy trials.

Speaker Change: The completed positive advance one quarter, one trials and the ongoing advance to our core two trials.

Speaker Change: Advanced two parallel group trial.

Speaker Change: CT tubes is a randomized withdrawal design.

Speaker Change: Given that target enrollment in both trials have been reached we are on track to report top line results from both advance to court to simultaneously this quarter.

Speaker Change: We look forward to these readouts as we believe that a favorable outcome.

Speaker Change: One or both of these ongoing pivotal studies in addition to the positive results from the two completed trials.

Speaker Change: Provides strong support for an NDA filing for an excess of five full hunter's disease agitation.

Turning now to access 12.

Speaker Change: We are currently conducting acute period, a phase three trial evaluating the long term efficacy and safety of <unk> 12 in narcolepsy called the encore.

Speaker Change: Or evaluating routine treatment with Reboxetine study.

Speaker Change: The trial consists of a 24 week open label period, followed by a three week double blind randomized withdrawal period.

Speaker Change: Enrollment in the trial is complete and we are on track to report topline results this quarter.

Speaker Change: The encore trial conducted as a registration study and provide additional support for our planned NDA for <unk> 12.

Speaker Change: Following completion of the trial and plan to request a pre NDA meeting with the FDA to discuss our planned submission.

Speaker Change: Rounding out our development pipeline, we continue to advance our four ongoing phase III trial of Soviet Paul.

Speaker Change: HD.

Speaker Change: These depressive disorder for MTBE.

Speaker Change: Beta units ordered and shipped with disorder, which we believe represent a significant expansion opportunities for solvay out the call.

Speaker Change: Yeah.

Speaker Change: Enrollment in the focused study our phase III double blind placebo controlled trial evaluating the efficacy and safety of solar installed in ADHD in adults is expected to complete in December and as a result, we now anticipate top line results in the first quarter of 2025.

Speaker Change: Additionally, the paradigm phase III trial, and maybe depressive disorder is progressing nicely with enrollment also expected to complete this quarter.

Speaker Change: Paradigm will examine the effect of solid roof tall, the ADT patients with and without excessive daytime sleepiness.

Speaker Change: We now anticipate topline results from the trials in the first quarter of 2025.

Speaker Change: Lastly, mitigate phase III trial, and Dave eating disorder.

Speaker Change: And a sustained phase III trial in shipboard disorder continues to enroll with top line results anticipated in 2025 and 2026, respectively.

Speaker Change: As we highlighted in previous calls so arena culture unique pharmacology.

Speaker Change: Dopamine and norepinephrine reuptake inhibitor.

Speaker Change: One in five Ht agonist, along with preclinical and clinical evidence support its potential to treat a broad range of CNS conditions impacting over 80 million people in the U S.

Speaker Change: What's the potential new indications post Waldorf call under study.

Speaker Change: Have the potential to deliver multiple value, creating catalysts and drive long term growth for solving them at all alone.

Speaker Change: In closing the path ahead.

Speaker Change: Axon includes a robust series of clinical.

Speaker Change: Regulatory and commercial milestones.

Speaker Change: With strategic focus.

Speaker Change: Personal excellence.

Speaker Change: <unk> balance sheet, we are confident in our ability to deliver significant near and long term value for patients and shareholders with that I'll hand, it over to Nick.

Nick: Thank you area today.

Nick: Today, I will share our third quarter financial results and provide some financial guidance, we delivered yet another robust quarter and recorded total net product revenue of $104 $8 million compared to $57 8 million for the same period in 2023.

Nick: Presenting an 81% year over year increase.

Nick: <unk> strong sales momentum continued with net product sales increased to $8 $4 million in the third quarter, representing 113% growth compared to the prior year period, and 24% sequential growth versus Q2 2024.

Nick: We're also pleased with the continued performance of Sanofi, which delivered net product revenue of $24 $4 million in the quarter or a 21% increase compared to the same period in 2023.

Nick: Gross to net was approximately 50% for ability and in the low fifties for Sanofi.

Nick: Our R&D expenses for Q3 were $45 4 million compared to $28 $8 million for the same period in 2023. The increase was primarily driven by our ongoing clinical programs for access so five and salary amphenol as well as increased chemistry manufacturing and control cost.

Nick: With our pipeline products and higher personnel costs, including noncash stock based compensation associated with the organizational growth.

Nick: SG&A expenses for the third quarter were $95 6 million compared to $83 $2 million for the same period in 2023. The increase was mainly a result of continued investments for the commercialization of ability instability, along with higher personnel costs, including noncash stock based compensation associated with.

Organizational growth.

Nick: Net loss for the third quarter was $64 $6 million or $1 34 per share compared to $62 2 million or $1 32 per share for the comparable period in 2023.

Nick: The $64 $6 million loss includes $49 million in noncash charges, which reflect a fair market value adjustment for contingent consideration this quarter of $16 $4 million.

Nick: Cash and cash equivalents totaled $327 $3 million as of September 32024.

Nick: As we approach the potential launches of extra so 17 migraine and other late stage assets in the coming years, we remain committed to our principal efficient approach to capital allocation that has yielded substantial returns to date.

Nick: As such we believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on our current operating plan.

Speaker Change: And with that I'll turn the call over to Ari <unk>, Chief commercial officer to provide details on our commercial performance.

Ari: Thank you Mick axiom delivered robust commercial performance in the third quarter of 2024. In addition to strong sales performance for all the audience. Sanofi Q3 saw continued improvements in market access dynamics for both brands, including an increase in covered lives for our ability for the second consecutive quarter reinforcing the strength and quad.

Ari: City of our commercial execution.

Ari: Ability once again outperformed the market and branded competitors with approximately 144000 prescriptions in the third quarter, representing 108% growth year over year, and 17% growth sequentially compared to the second quarter.

Ari: By comparison, the antidepressant market grew 1% year over year and sequentially.

Ari: Nearly 26000, new patients were prescribed our ability in this quarter, bringing the total number of new patients started on ability since launch to nearly 140000.

Ari: Our sales teams successfully activated more than 4100, new prescribers in the third quarter and continues to penetrate both the psychiatry and primary care markets. Among M D as NPS and Tas, who care for the majority of depression patients across the U S.

Ari: On the market access front, our previously announced expansion of covered lives for our ability resulted in meaningful increases in new patient starts and covered claims.

Ari: Coverage continues to evolve and expand and mobility now has 63% of commercial lives covered and 78% of total lives from across payer channels.

Ari: Negotiations with payers and Pbms are advancing across the access landscape.

Ari: To build on the success of the <unk> launch we are planning a second expansion of our <unk> Psychiatry sales force to approximately 300 sales representatives, which is expected to complete in the first quarter of 2025.

Ari: The increase in share of voice combined with strength in market access outstanding product attributes and positive provider and patient experiences without valley will position the brand for further growth as we enter another pivotal year for axon.

Ari: Turning to Sanofi.

Ari: Total prescriptions were approximately 47000 in the quarter, representing 15% year over year growth and 5% sequential growth.

Ari: By comparison, the weight promoting agent market grew 3% year over year and 4% sequentially.

Speaker Change: He knows he had strong performance with new patient prescriptions. Once again in Q3 with more than 4100, new patients initiating <unk> treatment during the quarter as the Sanofi team continues to drive that with existing prescribers. While also activating approximately 400, new writers in the quarter.

Speaker Change: Turning now to access those seven.

Speaker Change: As Eric mentioned in his opening we are eagerly anticipating the January 31 could use the data for this innovative treatment.

Speaker Change: Migraine is the leading cause of disability among neurological disorders and affects approximately 39 million Americans, 70% of them report not being fully satisfied with their current treatment due to sub optimal efficacy.

Speaker Change: If approved <unk>.

Speaker Change: Those seven distinct multi mechanistic pharmacology has the potential to address this unmet need.

Speaker Change: Launch preparations are well underway, including the build out of the <unk> sales team, we anticipate a commercial launch in the first half of 2025.

Speaker Change: In closing we have made significant progress in 2024, our second full year as a commercial company and firmly establish <unk> as a trusted partner for providers patients and payers, providing a solid foundation for continued commercial performance for <unk> as well as future product launches.

I will now turn the call back to Darren for Q&A.

Speaker Change: I'm, sorry, I'll now turn it over to the operator to begin Q&A.

Speaker Change: Thank you at this time, we'll be conducting a question and answer session.

Speaker Change: To ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue. You May press star two if he would like to remove your question from the Kid.

Speaker Change: We ask that you limit your questions to one and a follow up so that others may have an opportunity to ask questions.

Speaker Change: Since using speaker equipment, it may be necessary to pick your handset before pressing the star keys.

Speaker Change: One moment, please while we poll for questions.

Speaker Change: Our first question comes from Vikram Pure ahead with Morgan Stanley. Please proceed with your question.

Speaker Change: Hi, everyone. This is Morgan on for Vikram. Thank you for taking our question so.

Speaker Change: On the ability of sales force expansion, how long would you expect this fall expansion to take and how much of a sales left what do you expect from the expansion and then I have a follow up after that thank you.

Speaker Change: Hey, Morgan. This is alright. Thanks for the question as we mentioned we expect the expansion to be completed in the first quarter of next year in terms of lift.

Speaker Change: Suggest that.

Speaker Change: Our last expansion.

The guidance, we gave was that the ramp would build over the course of the year. I think you saw as we completed that expansion in January of this year, we started to see the impact straight away.

Speaker Change: And that's been part of the reason why the brand has performed so well over the course of this year. So we would expect a similar impact for the second expansion.

Speaker Change: Okay. That's helpful. Thank you and then.

Speaker Change: Would you say how much of this native would be driven by the desire to expand an M D D versus preparation for a potential launch as well.

Speaker Change: And this is really about MTBE and the rationale for it recent market access wins and expanded the potential for <unk> first or second line treatment. We've also seen promising growth in the primary care market. We expect further improvements in market access moving board and continued growth in primary care. So this this.

Speaker Change: Makes sense to capitalize on those dynamics, but to your point, we do see potential synergies after the future if 88.

Approved.

Speaker Change: And so we'll share more updates on that at the appropriate time.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Jason Carberry with Bank of America. Please proceed with your question.

Jason Carberry: Hey, guys. Thanks for taking my questions.

Jason Carberry: First just on <unk> I'm curious your thoughts on new atypical anti psychotics that are likely to be approved next year.

As adjunctive I get that these are technically considered different segments of the market but.

Speaker Change: You know is it fair to think that that's the.

Speaker Change: Target patient that might be an option for a new mono therapy with a different mechanism.

Speaker Change: Versus considering going onto adjunctive theres sort of a competitive tension there. So I'm just wondering if these new in any way typical like kept light a better tolerability profile might be.

Speaker Change: Somewhat of a competitor or two ability. That's my question first question and then just as a follow up.

Speaker Change: On the 80, a marketplace I know in the past you guys have said you feel like you have a differentiated profile. So whatever we're seeing with Rick salt he may not be applicable to an eventual ability launch, but I guess the one thing. We've heard is a big issue has been high out of pocket costs for patients and because of the high Medicare SKU.

Speaker Change: Sponsors are really able to defray those costs through co pay assistance program. So how do you overcome that hurdle at which seems more intrinsic to the 80 a marketplace. That's my follow up thanks.

Great Yeah, no. Thanks, Jason for the question.

Speaker Change: Start with the typical question, Yeah, obviously adjunctive MBV is slightly different than monotherapy mbd and although there is you know used to be typical.

Speaker Change: You know in addition to mono therapies, we do see these as distinct marketplaces. As we've stated previously we firmly believe that <unk> is the first or second line treatment typically atypical will come into play in later lines third or fourth you know when the patient has had.

Inadequate response to immunotherapy treatments on your comment about capital at its Tolerability profile I believe is related to other atypical because our safety Tolerability profile I would say it is very strong in this marketplace.

Speaker Change: So while we expect there to be some level of noise. Ultimately we believe our key competitive set is with monotherapy SSRI SNRI and that's how we're commercializing the product.

As it relates to a D a.

Speaker Change: You have been following the <unk> launch very carefully.

Speaker Change: And I think you know for any branded agent on the market plays out of pocket expense is always a top concern or providers and patients.

Speaker Change: Part of our strategy is to continue to develop strong working relationships with payers and pbms across the landscape.

Speaker Change: As we develop those relationships and expand coverage or ability and Sanofi, we expect there to be benefits for the NDA launch, which should set us up to help mitigate out of pocket expenses for those patients over time.

Speaker Change: Thanks, So you guys wouldn't expect to have $200 out of pocket kind of co pay costs borne on these patients.

Speaker Change: Yes, Jason it really depends on the coverage.

Speaker Change: The rebate agreements that we have with the plan. So it's a little premature to comment exactly on the out of pocket expense, but our.

Speaker Change: Our goal is to ensure that there's access for every patient and that out of pocket expenses. It is managed appropriately.

Speaker Change: Thank you guys.

Speaker Change: Our next question comes from Leonard Temasek with RBC capital markets. Please proceed with your question.

Speaker Change: Hi, guys. Thanks for taking my question and congratulations on the quarter.

Speaker Change: Simple one for me I guess on it.

Speaker Change: Now that you've reached target enrollment in both advanced two and of course to talk about both how the patients you've enrolled in advance to compare to advance one and what your expectations would have been and then also the event rate for CT to compare to your expectations. Thanks.

Speaker Change: Sure.

Speaker Change: Thank you for the question so as you mentioned.

Speaker Change: <unk> reached target enrollment in as it relates to the patient populations are very similar so we do have an exclusion criteria or events. One in advanced two studies or or very similar and I would say the food thing with regards to <unk> and according to the goal was.

Speaker Change: To make advanced too.

As well in our court to replicate of studies.

Speaker Change: As it relates to the event rates and event rates or what we're expecting them to be.

Speaker Change: And that is why we're confident that we will be able to have a readout this quarter for both.

Speaker Change: Two study as well as the advance two study simultaneously.

Speaker Change: Yeah.

Speaker Change: Yes.

Yeah.

Our next question comes from Charles Duncan with Cantor Fitzgerald. Please proceed with your question.

Speaker Change: Hey morning area and team congrats on a nice quarter and.

Speaker Change: I appreciate all the color on the pipeline lots going on I had a couple of questions. One is kind of commercial and access so five and then a follow up in terms of the pipeline and its upcoming Readouts with regard to ability are you getting more.

Speaker Change: More traction with Psychs or P C p's.

Speaker Change: And is the rapidity of response, a driver to that and do you think that that profile could read on potential differentiation relative to say regs healthy. It's good drugs shows effects and <unk> and is approved for a D. A.

Speaker Change: Hey, Charles sorry, Thanks, so much for the question to answer your question, where we're doing quite well in both the psychiatry and primary care markets that said in Q3 primary care clinicians were the fastest growing segment, which is a really great signal something we've talked about historically.

Speaker Change: We expect that segment of the market to continue to grow. So we're really pleased with the progress that we're making in the primary care segment.

Speaker Change: Comment about rapid acting is spot on it is one of the top drivers of utilization in the depression market and yes based on our early conversations with Kols in the Alzheimers agitation market that rapidity of response is a very compelling attribute that we think we will.

Speaker Change: <unk> be a core part of our brand story if launch.

Speaker Change: Helpful. Thanks Hillary.

Speaker Change: Relative to the upcoming access so five readout looks like advance two is slightly smaller sample size than the advance one so.

Speaker Change: Does that make you at all concerned about what you might observe there in terms of effect size and then can you provide us any color on the ongoing open label extension study in terms of enrollment or.

Speaker Change: Rollover in Tibet, and then persistence.

Speaker Change: Right.

Speaker Change: So with regards to the sample size for advanced too.

Charles: Charles So the sample sizes are that you see in our <unk>.

Charles: Slide presentation. These are target enrollment numbers and the numbers are always differ slightly once you actually complete enrollment never reached the exact numbers you might you believe it's plus or minus so I wouldn't read too much into that except that much of that number and.

Charles: And use it as a guide to how the study is.

Charles: Howard.

Howard: In terms of the open label extension, where we've seen a very nice Oh, a very high percentage of patients rolling over from the controlled studies into the open label extension studies or do you believe with smoking study and usually that's a positive sign in terms of how patients and caregivers pristine.

Charles: A product so we're.

We're very happy to see that another benefit of our high enrollment rate and the open label safety extension study is that it does allow us to move towards.

Charles: Our target exposure numbers, which are needed from an ICA perspective too.

To enable an NDA filing and on that front, we're very well positioned.

Charles: Okay.

Speaker Change: Excellent. Thanks for the added color here.

Charles: Yeah.

Charles: Okay.

Charles: Yes.

Speaker Change: Our next question comes from Trina Chen with Wells Fargo. Please proceed with your question.

Trina Chen: Hi, Thanks, so much for taking my question and congrats on the strong quarter.

Trina Chen: I wanted to ask about sorry, Tal and each team with the focus study now pushed out to <unk> 25, I was just wondering if there is any kind of slowdown or competition and sorry enrollment.

Trina Chen: And then what is your thinking on running the pediatric study and you're still planning to start that prior to or potentially after the adult data readout. Thank you.

Trina Chen: Is there anything good morning.

Mark Jacobson: This is mark so with respect to timing that that's simply final the final screening funnel and kind of what we're seeing with our studies already over 95% enrolled it was just our final estimate of her.

Mark Jacobson: How long vital patient enrollment.

Speaker Change: They too.

Speaker Change: Thats all moving along and then with respect to the pediatric study.

Speaker Change: Those plans are in the works and we're going to launch that in phases.

Speaker Change: Basically as soon as we're able.

Speaker Change: So also stay tuned for that but it's not it's not predicated on.

The focus study per se.

Speaker Change: Yeah.

Speaker Change: Thank you.

Speaker Change: Hum.

Speaker Change: Yeah.

Speaker Change: Our next question comes from David M Baum with Piper Sandler. Please proceed with your question.

Speaker Change: Hey, Thanks, So wanted to ask about the cost structure broadly speaking and and I know you know I'm not asking for any sort of guidance question about 2025, but I did want to drill down on how are you thinking about R&D spend not.

Speaker Change: For next year, but as you think beyond that particularly with a lot of programs a lot of studies wrapping up next year, how should we think about that and then secondly regarding promotional spend I mean, I know you have the expansion of the sales force in support of mobility, but how are you thinking about.

Speaker Change: Say migraine, and then all timers, and the extent to which you're going to be adding head count to support these additional.

Speaker Change: Opportunities help us understand.

Speaker Change: How SG&A is going to expand next.

Speaker Change: Next year and beyond thank you.

Speaker Change:

Speaker Change: Maybe I'll just give just some overarching comments and then let.

Speaker Change: The other members of the team provide more detailed but just overall the way that we've thought about.

Speaker Change: Pending in terms or whether it's for R&D or for commercialization is to approach it in a very rational way.

Speaker Change: So there is an intense focus.

Speaker Change: And the company culturally on return on invested capital so everything that we do.

Speaker Change: We'll be very well thought out and will be done in a rational way now that may differ from what.

Speaker Change: Maybe you're used to move with the with all the companies.

Speaker Change: However, we think that that's the right way to run the business.

Speaker Change: Sure Yeah, and maybe just hey, David This is Nick and just just to add onto Terri I think he made the key points, but we as axon right now at the end of Q3 are in the strongest capital position that I'd say, we've ever been since inception.

Speaker Change: As a reminder, with our current cash on hand.

Speaker Change: We have the ability to get to cash flow positivity and execute on all of our priorities that are that are in our operating plan.

Speaker Change: Including further investing in ability so that'd be the launch of the excess of seven and just furthering our pipeline.

Speaker Change: And then just maybe specifically on this quarter.

Speaker Change: In Q4, and how we how we should think about Opex in Q4, we saw Q3.

Speaker Change: We had a decrease in R&D and SG&A in the previous quarter, we would expect a slight increase in Q4 as it relates to R&D spend and that's mainly due to the producers say brakes 14, so were filing that shortly and then SG&A against.

Speaker Change: I guess, it's actually slightly increasing just as we prepare for the migraine launch.

Speaker Change: Okay. Thanks for that.

Speaker Change: Okay.

Speaker Change: Our next question comes from Marc Goodman with Leerink. Please proceed with your question.

Speaker Change: Yes. Good morning first of all on <unk> can you just give us a sense of how the product is being used and how that's evolving second question is.

Speaker Change: But the expansion in the sales force, that's just for <unk>, but.

Speaker Change: But how are the.

Speaker Change: Rep is going to be used for the migraine launch I know the question's been asked a few times, but just I'll ask it again like are we going to have another expansion for the migraine. When it's approved or are we going to leverage these reps that you're about to add and then just lastly on <unk> can you just give us an update on.

Speaker Change: What you need to file this product you're running another study you have the positive studies. So do you need this study to be positive to file or are we looking for more patients for a long term safety just curious what's the gating issue there is thanks.

Hey, Mark it's Barry I'll start with the <unk> utilization.

We again saw a incremental increase in first and second line use it remains around 50% first or second line use.

Speaker Change: In Q3, so pleased with sort of the incremental growth and we expect that to continue to bill and particularly as we bring more market access online for the product. In addition, when you think about mono therapy or adjunct use again, we saw an increase in monotherapy use.

Speaker Change: It remains around 50% mono therapy.

Speaker Change: So overall the trends are in line with our expectations and we expect that to continue to improve over time.

Speaker Change: It relates to the expansion. This expansion is for mobility M D D.

Speaker Change: When you think about the migraine launch.

Speaker Change: We do intend to enter the migraine market and a targeted differentiated way that leverages our experience with all ability. So there will be a an additional.

Speaker Change: Expansion, if you will of sales representatives and I'll say that we've made significant progress over the past year with our digital centric commercialization model, we expect them to benefit from this experience that launch.

Speaker Change: We will be engaging with top migraine treaters and headache centers large neurology clinics et cetera. So we will share additional details as we get a little bit closer.

Speaker Change: Okay great.

Speaker Change: Great.

Speaker Change: As it relates to the remarks of your question. So Mark I think what you're referring to is our encore trial. This is the phase III trial in patients with narcolepsy. So we do not need this study.

Speaker Change: To be positive in order to be able to file an NDA. So we already have our two studies, which will support.

Speaker Change: Yeah for some claims.

Speaker Change: We want to make with regards to <unk>.

Speaker Change: With oxiclean or excess 12, however.

Speaker Change: The phase III trial.

The long term the phase III more firms safety extension trial it doesn't cooperate.

Speaker Change: Free week randomized withdrawal period. So that's always been the design of the study from the very beginning.

And it was just up there has not been much focus on it so as the new year. The readout for that study did want to point out that this is in fact.

Speaker Change: A controlled study and it should provide additional efficacy data and if it's positive.

Speaker Change: Fantastic.

Speaker Change: For English stronger package.

Speaker Change: But you are filing anyway with or without a positive study.

Speaker Change: Correct and the Jan course studying it has two periods. One is the open label period, that's a six month.

Open label safety extension trial, so that was the.

Original reason for running the study so we do need that part of the study in order file and then.

Speaker Change: Using.

Speaker Change: Our our strategy that we've used in the past, which is to make sure that that we're efficient in everything that we do when we designed the study we did include it.

Speaker Change: The double blind phase.

Excess 12 are supposed to be both.

Speaker Change: Thanks.

Speaker Change: Our next question comes from Joseph arm with P D Cowen and company. Please proceed with your question.

Speaker Change: Hi, there good morning, and congrats on the progress and thank you for taking my questions. Maybe first one I'm sorry, I'm still in MPD, I guess, given sort of the high bar that ability is set and the indication of what sort of the area for differentiation that youre looking forward here to consider additional investment on.

Speaker Change: On that program and then second in your thinking about the enrollment of except for five of the Alzheimers agitation where are you finding these patients what sort of the last touch point before being referred into the study because it in neuropsychiatry offices that are also more citizen as a primary care Doc kind of where.

Speaker Change: Where can we find these patients into the different in the commercial setting.

Speaker Change: That's great.

Speaker Change: So thank you for the question as it relates to solar oriented following major depressive disorders, and we are studying slowly if at all.

Speaker Change: Patients with them, both with and without excessive daytime sleepiness.

Speaker Change: If you look at the drug from a pharmacology perspective. It has a novel mechanism of action, which is.

Speaker Change: We can all one receptor agonist.

Speaker Change: That can provide the marketplace and clinicians and patients.

Speaker Change: Brand new mechanism of action.

Speaker Change: And MTBE and Internet M D.

Speaker Change: Heterogenous patient population to have different mechanisms of action, they're useful we've seen that firsthand with the ability with its novel mechanism of action and how that has been received by the marketplace.

Speaker Change: As it relates to other points of differentiation.

Speaker Change: One of the.

Speaker Change: Aspects of the clinical aspects of major depressive disorder.

Speaker Change: Association and comorbidity with excessive daytime sleepiness somewhat so that is one of the areas that we would look to explore.

Speaker Change: Hum.

Speaker Change: <unk> study so stay tuned.

Speaker Change: We're looking forward very much to learnings from that study about the potential profile of forwarding on for Paul.

Speaker Change: And.

Speaker Change: The other question.

Speaker Change: Which you asked related to old timers disease, agitation and where those patients are coming from.

Speaker Change: The way that the clinical studies or Ron you've got.

Speaker Change: We and other companies.

Speaker Change: Partner with clinical trial centers that are there.

Speaker Change: That specialized in psychiatry, so the so the way that our clinical trial enrollment works not to go specifically to.

Speaker Change: The general population, although we know there is advertising needs to go into centers that have experience in relationships and taking care of these patients.

Speaker Change: So that's what I, that's where the patients are coming from.

And.

Speaker Change: As it relates to you know how that might translate into commercialization and then one point of differentiation with our program.

Speaker Change: That focus on community dwelling patients. So these.

These are not a nursing home patients and one of the potential benefits of the successful five an all time most of these applications should they be successfully developed in fact to keep patients out of the nursing home.

Great. Thank you.

Speaker Change: Our next question comes from Jeremy with True Securities. Please proceed with your question.

Speaker Change: Good morning. This is awesome one for Jim Congrats on the quarter and thanks for taking the questions.

Speaker Change: The first question for me is can you remind us what the powering effect size of the advance two study is.

Speaker Change: And then as a follow up on the ability you know have you seen some sort of inflection from the increased coverage of $22 million additional new lives on August 1st.

Speaker Change: Or would you say you're seeing more of an inflection due to the sales force expansion from earlier this year. Thank you.

Speaker Change: Yeah.

Speaker Change: So advanced to a powered very some of them will need to advance one so its 90% powered to detect a treatment difference we.

Speaker Change: We have not talked about exactly what the effect sizes, but the effect size that it is powered to detect a similar cause and effect size.

Speaker Change: That is one.

Speaker Change: And thanks for the question on mobility inflection.

Speaker Change: We're very pleased with the.

Speaker Change: Demand that we've driven a post the market access expansion.

Speaker Change: We have seen meaningful growth in both new patient starts and covered claims. In addition, we've seen a reduction in rejection rates for those covered lives and so overall, we're very pleased with the performance.

Speaker Change: I think keep in mind that that win occurred.

Speaker Change: During the summer seasonality months, so we expect that to continue to build over time.

Speaker Change: So I don't think it's a fair comparison to say, which created more inflection, but given the fact that the expansion of sales force expansion with earlier in the year. It's obviously had more time to make an impact and we've been very pleased with the impact we've seen over the course of the year.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Myles Minter with William Blair. Please proceed with your question.

Speaker Change: Hey, just back on the sales force expansion I know you've still got one large J P. R contract that you can potentially execute here.

Speaker Change: That's 300 sales force expansion next year, incorporating that you'd get that or is it more from the level of access that you have.

Speaker Change: Now you think that that expansion is required and if you bring on another J P. I contract, we could get a further expansion and then just secondly on access full chain.

Speaker Change: Have you started to engage payers I mean is that sort of if you make benefit off the tape that you might say with that agent.

Speaker Change: That jobs with them potentially having a copper of branded therapy process. Thanks very much.

Speaker Change: Yeah, Hey, Myles so regarding the Salesforce expansion, it's not specifically tied to a future market access when it's really to capitalize on the market access we have today and sort of the increase in first and second line access that we've experienced this year.

Speaker Change: But also the growth we've seen in primary care in 2024.

Speaker Change: There are two of the primary reasons why we believed it was it was the right time to add additional selling effort.

Speaker Change: Any additional market access wins would be additive.

Speaker Change: To choose this expansion and further accelerate procurements.

Speaker Change: Yeah and you.

Speaker Change: You asked a question about whether or not you're starting to engage payers as it relates to with with <unk>.

Speaker Change: Yeah. So nuts, we do talk to payers regarding our pipeline generally speaking and obviously the things that are more near term to launch are of more interest as it relates to sort of a payer or rebate negotiation that said I.

Speaker Change: I think it's fair to say that payers are very impressed with the breadth of our portfolio.

Speaker Change: They recognize that these are areas of significant unmet need and although there are existing treatment options, there's still plenty of room to improve on not only symptom improvement in quality of life, but also health resource utilization and so we feel very good about the.

Speaker Change: The strength of the profiles of 14 and in others and believe we will have constructive negotiations once we get closer to launch.

Speaker Change: Okay.

Mark Jacobson: Mark just to your observation on fatigue in particular, we do so that is an important element.

Speaker Change: Uh huh.

Mark Jacobson: Yeah.

Mark Jacobson: Makes sense thanks for the questions.

Mark Jacobson: Okay.

Speaker Change: Our next question is from some get some Jr. With Guggenheim Partners. Please proceed with your question.

Speaker Change: Hey, Good morning. This is Eddie on for Gautam. Thanks for taking my questions and congrats on the quarter for.

Speaker Change: For OLED, what signs are you getting from them from a real world rate of discontinuation, especially as it relates to the pivotal studies and other sort of branded antidepressants on the market and then in terms of the coverage you know it looks like you're creeping up in terms of the commercial coverage, but what are the major hurdles, you're seeing to getting broader coverage access on that commercial channel beyond that sort of $60 65 per.

Speaker Change: Cent range. Thanks.

Speaker Change: Yeah. Thanks for the question regarding discontinuation, we haven't seen anything significant over the course of this year and in fact, the persistency that we've observed has been very positive in fact.

Speaker Change: One of our internal analyses suggest that ability persistence outpaces that of Ssris and etcetera. So we're really pleased with that theres been no impact from any of the ongoing clinical trials in the marketplace in terms of hurdles, it's really about.

Speaker Change: Aligning on final rebates and utilization management criteria with the outstanding plans and we're very confident in the negotiations.

Speaker Change: That we've had and expect to see access expanding involved in the near term.

Speaker Change: Thanks.

Speaker Change: Our next question comes from Ami should be out with Needham <unk> co. Please proceed with your question.

Speaker Change: Hi, this is putting on Tommy Thank you for taking our question.

Speaker Change: My first question is how do you anticipate the prescription trends that I think are different and so it's quite a number of holidays.

Speaker Change: And could you provide us some additional color on the timing of a data readout expected in fourth quarter of phone.

Speaker Change: Agitation in migraine.

Speaker Change: And lastly does that am I studied in any way impacted aggravating decision on January five thank you.

Speaker Change: Hey, Amit this is <unk> I'll start with the demand question. So we do expect there will be some impact from seasonality in Q4 quantifying that is a little difficult at this time.

Speaker Change: I would point to Q3, which also theres, a seasonality effect and ability.

Speaker Change: Outpace the market.

American branded market, which those are big.

In both cases, and so we feel optimistic that we'll be able to continue to grow the brand, but we do expect some seasonality impact in Q4.

Speaker Change: Good morning.

Speaker Change: With respect to the cadence of the readout.

Speaker Change: I mean excuse me between now and the end of the year that that that's right around the corner. So I think I think if you can stay tuned for that and.

Speaker Change: We haven't we're not this morning, we didn't provide guidance on the exact choreography, but again its right around the corner and we're looking forward to providing updates there and then with respect to emerge I think I heard. The question is is that needed for the for the NDA submission.

Speaker Change: Submission of Resubmission and or from a regulatory perspective, and so just as a reminder, that's the eighth of those seven trial that will read out and that is not needed for regulatory perspective, instead, we expect that to whatever we learned from that well.

Speaker Change: Or potentially approaching the marketplace in medical and potential commercial communications.

Speaker Change: Got it thank you.

Speaker Change: Our next question comes from Joel Beatty with Baird. Please proceed with your question.

Joel Beatty: Thanks first question is part of the sales force expansion how much more reached as I gave you like for example, how many more docs does that allow you to cover that.

Joel Beatty: The second question is for a D. A when would you expect to be able to file.

Joel Beatty: Yeah, Thanks, Joe for the question.

Joel Beatty: There will be some increase in reach but I think importantly, there's also a frequency play here for high decile providers.

Joel Beatty: And so we feel really good about you know the markets in which we're expanding capitalizing on the strong market access in those markets.

The only think that there'll be sort of a dual benefit and getting in front of more doctors that I have a specific number for you at the moment, but also frequenting those doctors.

Joel Beatty: More regularly.

Joel Beatty: And as it relates to timing of filing the wall along with disease agitation. The choreography is that once we have the readouts from the ongoing studies.

Joel Beatty: We will then gain.

Joel Beatty: After your pre NDA meeting and then but in general the way we think about it is it takes roughly six to nine months. After completing the study in order to get a package ready for filing.

Speaker Change: Thank you.

Speaker Change: Our next question comes from Greg <unk>.

Speaker Change: Jess This is a securities. Please proceed with your question.

Speaker Change: Okay.

Speaker Change: Good morning, Congrats on the progress in the quarter and thanks for taking my question My.

Speaker Change: My question is primarily on access so five and 80 agitation could you. Please provide your take on the various potential phase III ADP agitation trial outcomes in other words I think you said earlier that you feel like hitting on either one of the two would be sufficient to support.

Speaker Change: Filing.

Speaker Change: But of the two trials, if you're gonna only hit on one how should we think about a positive advanced two enabled a filing versus an accord two enabled.

Speaker Change: S N D filing them and then I've got a follow up please thank you.

Speaker Change #100: Well thanks for the question.

Speaker Change #101: Just as a reminder, the program consists of four pivotal studies.

We've already run out two of those studies, which or a positive.

Speaker Change #101: So going into these two read outs.

Speaker Change #101: There are two possibilities.

Speaker Change #102: Well there are several possibilities but.

Speaker Change #102: One possibility is that both studies are positive in other words, a cord to advance two or that.

Speaker Change #102: One of those studies is positive.

Speaker Change #102: In either of those situations that would leave us with three or more positive efficacy trials.

Speaker Change #102: To support an NDA filing and that is more than is needed from a regulatory.

Speaker Change #102: Statutory perspective, so we feel really good going into the data read out.

Speaker Change #102: What we like about the program and the.

Speaker Change #102: The fact that we have four studies that.

Speaker Change #102: That you can provide a lot of information in terms of the product profile and ultimately with the safety profile of the product in this population.

Speaker Change #103: Okay. Thank you.

Speaker Change #103: For that and then.

Maybe if I could just ask about the gross to net I think it was 50% for ability in the third quarter I might've missed our comments around the expectation for the fourth quarter, but any comments just on fourth quarter and perhaps looking into 2025, specifically on the mobility growth.

Speaker Change #103: Matt.

Nick: Sure go ahead Nick.

Nick: Correct with <unk> in the quarter was approximately 50%.

Nick: It was a slight improvement from the low to mid fifties in the previous quarters, we would expect it to remain in that approximately 50% range to slightly worsening for the fourth quarter similar to the prior year and for 2025.

Nick: I would anticipate that that's similar negative seasonality impacting Q1 that we've seen in previous years and the rest of the pharma industry is typically and that's due to the reset of deductibles.

Nick: We would expect that to improve throughout the year, so labor against the previous years.

Speaker Change #104: Okay. Thank you for taking my questions.

Speaker Change #105: It appears we have time for two more questions.

Speaker Change #106: Our first question comes from Iran, self insure them with H C. Wainwright. Please proceed with your question.

Speaker Change #107: Hi, This is eduardo on for Rob. Thanks for taking the question I had a question regarding the fibromyalgia asset and specifically if you were expecting to have a discrete sales force to promote sales of that if it were approved.

Speaker Change #107: And also if you could give a little color to the binge eating disorder market and the nature of the competitive landscape in that indication.

Speaker Change #107: Okay.

Speaker Change #108: Yes, so I'll start with the aircraft 14 question.

Yes.

Speaker Change #108: The fibromyalgia market is there.

Speaker Change #108: And then by a broad group of prescribers across primary care rheumatology specialists.

Speaker Change #108: And similar to my comments about it was seven and we intend to market and enter the market in a targeted differentiated way that really leverages. The experience we've seen with all ability.

Speaker Change #108: Right now I think it's fair to say that there will likely be some distinct selling particularly in those specialties, where we don't currently call on but in primary care, which is a large segment of the provider group there is potential for synergy with our existing sales force and so we will share additional details as we get a little bit closer to launch.

Speaker Change #109: Yeah as it relates to our vision.

Speaker Change #109: Right as it relates to our men's eating disorder and the market for that this is a very large patient population or 7 million patients.

Speaker Change #109: In the U S, who have binge eating disorder, and there's only one product that is currently approved and and so that that's five and so we think that there's a lot of clinical need and a lot of opportunity to.

Speaker Change #109: I'll respond to that clinical need with solely epitope.

Speaker Change #109: Should it be successfully developed.

Speaker Change #109: Okay.

Speaker Change #110: Great and if I could have just one last one if you had any data a background that Hudson also you're doing outside of the U S.

Speaker Change #109: Yeah.

Yeah.

Speaker Change #111: Sure, Yes, Sanofi continues to perform well outside the U S. We do outlines the royalty revenue that we receive from farm Adobe and you'll be able to see that that's been increasing over the last couple of quarters is as it's been a.

Speaker Change #111: A further prioritize at farm it out yet and new European countries.

Speaker Change #112: Our last question today comes from Matt Kaplan with Ladenburg Thalmann. Please proceed with your question.

Matt Kaplan: Hey, good morning, guys. Thanks for taking the question just with the a D. A.

Matt Kaplan: Data read out in the near term what are your current what's your current thinking in terms of the launch plans with respect to filing.

Speaker Change #114: X S O five as a reality or a new brand.

Speaker Change #114: And the ATM market.

Speaker Change #114: Okay.

Speaker Change #114: Thanks, Matt for the question.

So.

Speaker Change #114: The nice thing.

Speaker Change #114: About the excess supply more of them as we need agitation is we do have the ability to file it as an NDA under various forms either in F&B a war its own freestanding NDA.

Speaker Change #114: There are benefits to each approach.

Speaker Change #114: We are still.

Speaker Change #114: Flooring b.

Speaker Change #114: The approach that we'll take.

Speaker Change #114: Stay tuned for that however, we can.

Speaker Change #114: If we can tell you is that it will be a very well thought out decision.

Harry: Alright, Thanks Harry.

Speaker Change #116: We have reached the end of our question and answer session and I would now like to turn the floor back over to Eric.

Eric: Sure closing comments.

Speaker Change #118: Well. Thank you again for joining us on our conference call today Axon has built a singular innovative late stage neuroscience portfolio spanning multiple indications in both psychiatry, and neurology, which has the potential to deliver differentiated outcomes for millions of patients and compelling returns for shareholders.

Speaker Change #118: We look forward to keeping you posted on our progress.

Speaker Change #119: This concludes today's teleconference. Thank you for your participation.

Speaker Change #119: At this time.