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Axsome Therapeutics Inc (AXSM) (Q1 2024) Earnings Call Transcript Highlights: Soaring Revenues ...

GuruFocus Research
·4-min read

  • Total Net Product Revenue: $75 million in Q1 2024, up 160% year-over-year.

  • Net Product Sales: $74.1 million in Q1 2024.

  • Royalty Revenue: $900,000 in Q1 2024.

  • Ability Net Product Sales: $53.4 million in Q1 2024, up 240% year-over-year.

  • Sunosi Net Product Revenue: $21.6 million in Q1 2024.

  • Total Cost of Revenue: $6.3 million in Q1 2024.

  • Research and Development Expenses: $36.8 million in Q1 2024, up from $17.8 million in Q1 2023.

  • Selling, General and Administrative Expenses: $99 million in Q1 2024, up from $74.2 million in Q1 2023.

  • Net Loss: $68.4 million in Q1 2024, or $1.44 per share.

  • Cash and Cash Equivalents: $331.4 million at the end of Q1 2024.

Release Date: May 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Axsome Therapeutics Inc (NASDAQ:AXSM) reported a strong financial performance with total net product revenue of $75 million in Q1 2024, showing a year-over-year growth of approximately 160%.

  • The company announced positive top-line results for AXS-12 in narcolepsy, which achieved its primary endpoint and significantly reduced the frequency of cataplexy attacks compared to placebo.

  • Axsome Therapeutics Inc (NASDAQ:AXSM) is advancing AXS-07 and AXS-14 towards NDA submissions, with AXS-07 on track for resubmission this quarter and AXS-14 nearing completion of pre-submission activities.

  • The company launched the ACCORD two study for AXS-05 in the treatment of Alzheimer's disease agitation, further increasing the robustness of their clinical program.

  • Axsome Therapeutics Inc (NASDAQ:AXSM) has a strong cash position with $331.4 million in cash and cash equivalents, believed to be sufficient to fund anticipated operations into cash flow positivity.

Negative Points

  • Despite strong revenue growth, Axsome Therapeutics Inc (NASDAQ:AXSM) reported a net loss of $68.4 million for Q1 2024, significantly higher than the net loss of $11.2 million in the comparable period in 2023.

  • The increase in net loss was attributed to $21 million in non-cash charges, primarily comprised of non-cash stock-based compensation.

  • Research and development expenses increased significantly to $36.8 million in Q1 2024 from $17.8 million in the comparable period in 2023, reflecting higher costs associated with ongoing clinical trials and product development.

  • Selling, general, and administrative expenses also rose to $99 million in Q1 2024 from $74.2 million in the comparable period in 2023, driven by commercialization activities and organizational growth.

  • The company noted a negative seasonality effect on GTN (Gross to Net) in Q1, which impacted the financial performance of its products.

Q & A Highlights

Q: Can you give us a sense of new to brand versus refill rates for Ability? A: (Herriot Tabuteau, CEO) New-to-brand currently accounts for about 25% to 30% of weekly prescriptions. We expect this to grow, but total prescriptions should outpace this due to the existing patient base and solid refill rates.

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Q: Regarding the ACCORD two study, what percent responder rate do you anticipate? A: (Herriot Tabuteau, CEO) I don't want to misspeak in terms of the exact responder rate, but it aligns with what has been modeled and wouldn't be included in clinical criteria if it didn't meet expectations.

Q: Can you discuss the volume impact expected from the latest GPO agreement? A: (Ari Maizel, EVP, Head of Commercial) It's premature to discuss the impact on gross-to-net from this agreement. We expect volume growth once we expand coverage, and we'll provide updates on the impact when appropriate.

Q: Could you elaborate on the percentage of commercial lives covered through the GPO you have contracted with? A: (Herriot Tabuteau, CEO) The GPOs represent a pool of PBMs, each with different numbers of covered lives. It's a meaningful increase over the 48% previously stated, depending on how many PBMs access the contracted rates.

Q: What factors impact negotiations with the third of the three largest GPOs for contracting Ability? A: (Herriot Tabuteau, CEO) The primary factor is the demand growth we're driving in the marketplace. Our ability to show volume growth in the absence of formal coverage is key to securing access.

Q: How does AXS-12 compare to existing approved marketed agents for narcolepsy, and is the impact on Cataplexy likely to be its most significant selling point? A: (Herriot Tabuteau, CEO) AXS-12 shows a significant impact on Cataplexy, with a third of patients experiencing a 100% reduction in attacks. It also impacts excessive daytime sleepiness and cognition, which should position it competitively in the market.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.