Axsome Therapeutics, Inc.

Good day and thank you for standing by. Welcome to the ATSOM third quarter 2021 financial results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you need to press star 1 on your telephone. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Mark Jacobs. Jacobson, Chief Operating Officer. Please go ahead.

Thank you, Operator. Good morning, and thank you all for joining us on today's conference call. Our earnings press release providing a corporate update and details of the company's financial results for the third quarter of 2021 crossed the wire a short time ago and is available on our website at axon.com. During today's call, we will be making certain forward-looking statements, These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of our investigational agents, our clinical and non-clinical plans, our plans to present or report additional data, the anticipated conduct and the source of future clinical trials, regulatory plans, future research and development plans, commercial plans, and possible intended use of cash and investments. These four looking statements are based on current information, assumptions, and expectations that are subject to change and involve risks and uncertainty that may cause actual results to differ materially from those contained in the four looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. You are cautioned not to place undue reliance on these four 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 Dr. Ariel Tabuto, Chief Executive Officer, Nick Peavy, Chief Financial Officer, Dr. Kevin Merliberty, Executive Vice President, Product Strategy, Lori Engelberg, Senior Vice President of Commercial and Business Development, and Dr. Amanda Jones, Senior Vice President of Critical Development. Ariel will first provide an overview of the company and then review recent developments and upcoming milestones. Following Ariel, Lori will provide a commercial update, and then Nick will review our financial results. We will then open the line for questions. Questions will be taken in the order they are received. And with that, I will turn the call over to Ariel.

Thank you, Mark. Good morning, everyone, and thank you all for joining Axon Therapeutics' third quarter 2021 financial results and business update conference call. Over the past several months, we have continued to advance our differentiated late-stage CNS product candidates aimed at meaningfully improving the lives of patients. I will provide an update on our development pipeline before turning it to Laurie, who will provide a commercial update. Starting with our first lead product candidate, the XSO5, which is undergoing an NDA review for the treatment of major depressive disorder. The FDA did not take action on the NDA by the August 22nd PDUFA date, as previously disclosed, and review of the application is ongoing. The agency recently informed us of two deficiencies related to analytical methods in the chemistry, manufacturing, and controls section of the NDA, which must be addressed prior to the FDA taking action on the NDA. We believe these deficiencies are addressable and are confirming the details of the request with the FDA. The XSO5 is also being developed for the treatment of Alzheimer's disease agitation. Enrollment in the Phase III Accord trial for the syndication is progressing. And based on current enrollment trends, we anticipate completion of the trial in the first half of 2023. With regards to the development of AXS05 in smoking cessation, we received positive pre-IND meeting written guidance from the FDA on a proposed clinical development plan. Based on this feedback, we plan to proceed to a pivotal Phase 2-3 trial in this indication and expect to provide timing on initiation of that trial next year. Moving on to our second lead product candidate, AXS07, a multi-mechanistic acute treatment for migraine. The NDA for AXS07 was accepted for review by the FDA with a PDUFA target action date of April 30, 2022. The FDA has also informed us that due to COVID-19 pandemic-related travel restrictions, they may be unable to complete an inspection of one of the AXS07 manufacturing facilities prior to the PDUFA date. They will continue to monitor the public health situation as well as travel restrictions, and we will keep you informed of any developments on this front. With two NDAs under active review, Axome is in a position to potentially commercialize two new treatments in the near to intermediate term for patients living with depression and migraine. Laurie will provide details on our commercial launch readiness for AXS05 and our prelaunch commercial activities for AXS07. The rest of our rich pipeline continues to advance. For AXS12, our product candidate being developed for the treatment of narcolepsy, we initiated a symphony phase three trial in the third quarter. Enrollment in the trial is progressing, and top-line results are anticipated in the first half of 2023. For AXS14, our product candidate for the treatment of fibromyalgia, manufacturing and other activities related to the planned submission of an NDA are ongoing. Based on the status of these activities, we now expect to submit the NDA in 2023. I will now turn the call over to Lori, who will provide a commercial update.

Thank you, Ariel, and good morning. Today, I will give you an update on our commercial activities as it relates to launch readiness for AXS05 and prelaunch activities that are progressing for AXS07. As Ariel stated, the commercial team has been actively preparing for the potential launch of AXS05, and we remain incredibly excited about the opportunity to bring this product to market for the millions of patients suffering from depression. We are ready and prepared should we receive approval. The U.S. remains in the middle of a mental health crisis. Multiple studies have been released recently stating dramatic increases in depression due to the COVID-19 pandemic. Most recently, a global study published in Lancet showed that worldwide rates of depression climbed by 28% in 2020, showcasing a devastating ripple effect of the COVID-19 pandemic. Awareness of mental health issues is at an all-time high, and people are talking about mental health today more than ever. Given the personal and economic burden associated with mental health conditions, there is an undeniably urgent need to bring support to those affected. If approved, AXS05 would be an important new treatment option for the many Americans living with depression. We are prepared and ready to bring this meaningful innovation to patients by commercializing the product soon after the potential approval. Our commercial launch strategy is innovative and purposeful with the intent to bring important new products to market in a meaningful way. We have undertaken great efforts to understand the needs of patients and the healthcare professionals who treat them. This information has informed our strategy. Our digital-centric commercialization or DCC technology enabled platform designed to increase efficiency and effectiveness of our marketing efforts is fully implemented, tested, and ready for execution. As a reminder, we have designed our DCC platform to use streamlined systems and digital enablement tools combined with sophisticated data and analytics to allow for a more effective, efficient, and meaningful engagement with physicians and patients. Last quarter, I stated that our impressive field leadership team was fully staffed. Over the past several months, they have been working hard on recruiting top talent to staff our field representative positions. At this time, we have offers formally accepted for a complete field force team. All offers are contingent upon approval. In the event of a potential approval, we anticipate having all field representatives on board, trained, and certified by launch. Our highly capable and experienced market access team continues to engage with payers in ongoing permitted discussions, ensuring awareness of Axiom, our pipeline, and the clinical profile of AXS05. We look forward to engaging with payers immediately after approval. Our marketing and patient support services teams have been working hard to ensure that our comprehensive patient support services and all marketing materials are complete, implemented, and ready for execution in anticipation of a potential approval. Our launch readiness preparations have been heavily focused on AXS05, however, We are also actively preparing for a potential subsequent launch of AXS07 for the acute treatment of migraine, a debilitating disease that continues to have a tremendous unmet need and impacts an estimated 37 million U.S. adults. Marketing activities are well underway, along with DCC integration and initiating AXS07 permitted payer discussions. We are enthusiastic about the potential opportunity that AXS 07 could bring to a market that still sees close to a 70% dissatisfaction rate with currently available therapies. The differentiated clinical profiles for both AXS 05 and AXS 07 have the potential to bring significant benefit to patients and the physicians who treat them. We are excited about the opportunity to potentially bring these important new products to market in an innovative and meaningful way. I will now turn it over to Nick, who will review our financials.

Thank you, Lori, and good morning, everyone. Today, we'll discuss our third quarter 2021 results and provide some financial guidance. We ended the third quarter with approximately $115 million in cash compared to roughly $141 million at the end of the second quarter, a net decrease of approximately $26 million. R&D expenses were $13.2 million for the quarter ending September 30, 2021, versus $14.8 million for the comparable period in 2020. The decrease in R&D expense was driven by the completion of NDA-enabling clinical trials that were ongoing in the prior comparable period. G&A expenses were $20.2 million for the quarter ending September 30, 2021, and $6.3 million for the comparable period in 2020. The increase was primarily related to pre-commercial activities and personnel expense, along with an increase in non-cash stock compensation expense. Net loss was $34.9 million, or $0.93 per share, for the quarter ended September 30, 2021, compared to a net loss of $22.9 million, or $0.61 per share, for the comparable period in 2020. We recently announced that we have expanded our term loan facility with Hercules Capital to $300 million, with $100 million now available upon this committed non-diluted capital gives us additional financial flexibility through both anticipated potential commercial launches for AXS05 and AXS07. We believe our current cash position of $115 million, along with the remaining committed capital from our $300 million term loan facility, is sufficient to fund our anticipated operations based on our current operating plan into at least 2024. That concludes our third quarter of 2021 financial review. I will now turn the call back to Mark to lead the Q&A discussion.

Thank you, Nick. Operator, may we please have our first question?

At this time, to ask a question, press star then the number one on your telephone keypad. Your first question comes from Charles Duncan of Cantor Fitzgerald.

Yes. Good morning. Thanks, Ariel and team, for the update and for taking our question. Yeah. So regarding AXS05 and the analytical deficiencies that were mentioned, I'd I guess I'm wondering if you could provide us a little bit more color, if you will, on that in terms of what would be expected to be able to address the deficiencies. Are there any additional clinical or non-clinical experiments that you need to run, or do you think that you'll be able to address these? uh with the information that you have on hand and if so what kind of timing are we are we looking at is it months or or quarters uh thanks charles for the question i'll turn it over to uh to kevin let's answer that question great thanks for the question uh so just just to give an update

We are actively working on the update to the analytical methods that the FDA has requested. But we are still in communication with the FDA to fully understand the specifics and the process to resolve the items that they brought to our attention. I will note that they are manufacturing specific that we understand right now. So it would be solely resolved from a manufacturing point of view based on what we understand from the agency at this time. And we expect our work to be complete on those methods in the near to intermediate term for resolution.

Okay, that's helpful. So you don't anticipate it impacting any ongoing studies with product candidates?

we would not anticipate that that would have an impact on any ongoing studies.

Okay, super. And then my second question is maybe for Ariel, about the treatment landscape in MDD. Lori mentioned the challenges of mental health and how awareness has really increased and lots of discussion on that. But I guess I'm wondering, when you think about daily chronic therapy paradigm of, you know, historic versus, say, an intermittent treatment paradigm, certainly for the more... How do you think about that relative to AXS05 and its role in the future treatment landscape?

We're excited about the potential role of XSO5 in the treatment landscape.

Because you know that the current treatment landscape leaves the vast majority of patients with inadequate responses. That is in terms of not just clinical response, meaning a reduction of 50% of symptoms, but also of remission. And if you look at those parameters in studies that we have conducted with XSO5, and those have been multiple studies now, both controlled as well as open label in various patient populations. The product definitely shows that it could meaningfully impact the treatment landscape and reduce rates of depression and improve rates of remission as well as a clinical response. So the breadth of the types of patients that we have studied spans totally naive patients who've never been treated with an antidepressant to patients who have had multiple lines of treatment. And the product so far appears to perform equally well in all of those lines of treatment.

So the other aspect to...

which is notable as the new mechanism of action, which we think is contributing to the clinical benefit that we're seeing. And so as a company, we're really excited to be developing a product which not only is needed by a large percentage of the population, but which is timely given the impact of the mental health pandemic on the increased incidence of depression. Laurie, do you have anything to add to that?

Sure. Charles, I always love waxing poetic, but what I'm about to state is really based off of an extensive amount of discussions with HCPs and market research that we perform. There is an undeniable need for a rapid onset of action in these patients, but what What I think people should not lose sight of is that only gets you a little bit of the way. What physicians are really concerned about is remission and durability. And the durability piece, given that our product has shown durability based off several studies, we believe will bode well for us.

Very good. Thanks for the added color. Look forward to the update on the analytical methods. Good day.

Your next question comes from Joseph Stone with Cohen and Company.

Hi there. Good morning and thank you for taking our questions.

Maybe the first one on the deficiencies, are these the only deficiencies that spurred the earlier letter or were there other deficiencies that you have since resolved with the FDA that you're aware of?

And then maybe second, just on the merit TRD data,

Should AXL5 be approved and launched, how can you best leverage some of these resistant and refractory patient data sets given that the label is going to be for MDD?

Thank you.

Thanks for the question, Joseph. With regards to the deficiencies that we disclosed today, these are the only deficiencies that we have been made aware of. So, you know, We're working with the FDA, obviously, as we've stated, to get clarity on the exact response. But this does not mean that these are the only deficiencies or only pieces of information that the FDA will request during the review. There could be more. Or these could be the only ones, just to be clear. So we're not making any predictions. And with regards to the TRD data that we generated, not just in the MERIT study, but in other clinical trials that we have conducted, let's be clear, the indication that we have applied for and that we are currently under review for is MDD, and so that's the indication. The additional data that we've generated we think will inform physicians in other healthcare professionals because they do see all sorts of patients, all kinds of patients who will come to them and it will be up to them to make up their mind as to how best to treat their patients. So we're trying to answer practical questions with regards to once the product is available and how it may perform. But to be clear, the indication that we are focused on is the NDD indication, which is nice. It is broad. It does encompass the full breadth of patients with NDD.

Great. Thank you.

Your next question comes from Vamil Devan with Mizuho Securities.

Great. Thanks so much for the call and for taking my questions. Maybe one more just around the deficiencies that the FDA mentioned. Can you clarify just sort of when you found out about these? And I guess it just seems like an unusual process here that you're going through as opposed to maybe getting a formal CRL and responding to that the way other companies had. Do you have any insights? Maybe it's more of a question for the FDA, but I'm wondering if you can share why you sort of ended up in this sort of unusual process. path here. And then the second question I had was more on the agitation trial, and it looks like you just kind of shifted out the timing for when that's going to be completed by a little bit. I'm just curious if you can give an update on exactly how far you are into enrollment in that trial at this point and anything that sort of has changed in terms of why the timing, why it's taking a little bit longer to complete then than you previously thought. Thank you.

So thanks a lot for the questions. I'll turn the agitation question over to Amanda who will provide some color on the trial and maybe some of the unique aspects of the trial and how that would impact interpreting the enrollment trends there. But I'll start by first answering your other questions. In terms of the timing of when we got the communication from the FDA on these deficiencies. We recently got them, so the very end of October. And since then, we've been trying to get details on them so that we could specifically respond. So we're still in the process of getting those details. And in terms of what you characterize as the unusual nature of this process, It is a unique situation, but remember, this is actually not unusual to receive information requests from the FDA during an NDE review where they might ask for additional information, whether that be in any discipline and including CMC as we have received. we don't view this information request from the FDA as unusual in and of itself. So I hope that that helps answer your questions around those points and then I'll turn it over to Amanda with regards to, who will answer the question regarding the Alzheimer's disease education trial.

Great, thanks. Yes, so a great point about the agitation trials. As a reminder, this is a randomized withdrawal study. So it's a two-period study where patients are enrolled and randomized, and then the trial completion is actually really contingent upon the number of relapses which occur. So based upon all of those variables, you know, the way we've been tracking the study, we are anticipating the study to complete in January. the first half so it's just um a slightly complex uh you know study design which um which again is all these different metrics that we're tracking related to enrollment okay thank you your next question comes from ram severaju of hc ringwright thanks so much for taking my questions um so just kind of following on from what others have already asked

I just wanted to clarify whether at this point you have clarity on if the FDA is going to issue a CRL at some point on AXS05, or if you think the currently outstanding matters can be resolved without the CRL, in fact, having to be issued. And if the CRL is going to be issued, and I'm not saying that that's going to be the case, I don't know. But if a CRL is going to be issued, then, you know, ultimately, given what you currently know about the deficiencies that remain outstanding, what would you expect resubmission of the NDA for AXS05 to be classified as, Class 1 or Class 2? Thanks. Thank you, Ram, for the question. So the first thing is class. whether or not, your question around whether or not a CRL is going to be issued, that is a, that would be an action, an FDA action. And we don't determine that. The FDA determines that. Now, what we can tell you is that, as we've stated in our press release and in the opening comments, the FDA has stated that these deficiencies with regards to analytical methods must be addressed before they can take action. And an action on the NDA would come in two forms. It could be either one in approval or a CRL. And what the FDA has asked us to do is to provide them information to resolve the deficiencies. That must be done prior to them taking one of those actions. I hope that that is helpful. So just as clarification to what you just said, Ariel, that means that it still remains possible that when you submit this information to the FDA, the agency will decide not to issue a CRL. That's still possible, right? I don't want you to you know, kind of handicap for us what the odds of that happening are, but just clarify for us whether that is indeed still possible, that the FDA may not ultimately issue a CRL on AXS05 once they see the data that you submit. The reason why I'm hesitating in answering your question is the way you've posted, which is in the negative, as if the presumption is that there would be a CRL and they would not issue a CRL. I guess what we're saying is that the agency clearly has not taken action on the NDA, which means that they have not issued a CRL. They also have not approved the product. Those are the two potential outcomes, and before they make their decision, they've indicated very clearly to us that they would like the information that they've requested. We are working to make sure that we understand exactly what needs to go into that response, and we will do that expeditiously. Okay, and then just on the CMC information that is being requested, I'm assuming based on the responses you gave to some earlier questions that In fact, this CMC information pertains to further characterization of the product as opposed to any change in the actual product itself. So this would not affect not only ongoing clinical studies, but would not require any further bridging work down the line in order to ensure not only that the product is approvable in MVD, but in other indications for which you ultimately may seek approval. Is that correct? That is correct. Okay and then just very quickly on the smoking cessation clinical program. Have you received information yet from the FDA regarding specific design parameters of this program including in particular the extent to which the agency wants to see long-term follow-up, long-term evidence of impact on smoking cessation or does that still remain to be determined at this point? So the point of the pre-INC meeting guidance was to get the agency's input on an entire clinical development plan to get XSO5 approved for smoking cessation. So that would include the design of the pivotal trials, of subsequent trials, and also of the safety database. So coming out of that process, We do have very clear guidance, which is why we've stated that based on that information, we can proceed into a pivotal trial. And so we can do that. We're very excited about that. And I think, you know, we are able to leverage and we have been able to leverage all of the data that has been generated with AXS05 in other indications and in both the long-term as well as the short-term setting. So, you know, the answer is yes. I think we do have a lot of information on the long-term safety of XSO5, and we believe that we'll be able to leverage that information for the development of XSO5 and smoking cessation. And just to clarify, with respect to the smoking cessation program, the FDA has already agreed that if this Phase 2-3 study results in a positive outcome, that you would be able to file on the basis of that for an approval in smoking cessation. And do you have a sense of whether the smoking cessation Phase 2-3 study could yield data before the end of 2022, or is it more likely to be a 2023 event? Thank you. We So the guidance that we've given is that we will provide further guidance on the exact timing of the initiation of the Phase 2-3 trial next year. And part of that is for planning purposes. We have a lot going on, two NDAs which are currently filed, an incredibly rich pipeline, and looking at 2023, we could be filing three more NDAs then potentially, depending on the outcome of a lot of these studies. So there's a lot going on. We are scaling up in terms of our capabilities to make sure that we can take advantage of all of these opportunities. And so that's why we would like to take our time and make sure that we can provide you with very precise guidance around when we would start that trial, you know, guidance that we can have confidence in, and we'll do that next year. And with regards to the pivotal nature of the studies, the Phase 2-3 trial would be a pivotal trial. And we believe that based on the guidance that we would need two studies in the indication, so the Phase 2-3 trial would be one of those two studies. Thank you.

Your next question comes from June Lee of Truist Securities.

Thank you for the update. You mentioned that deficiencies could be resolved near to mid-term.

Can you define what that means, that weeks, months, or quarters? And then you stated that all the offers have been made for the sales force, but that they're contingent upon approval. Is there an expiration date on those offers? Thank you. Sure. I'll let Lori take the second question. Sure.

So the current contract as it states, and we're thinking through June, so depending upon additional clarity from the FDA, how we leverage the offers that are already outstanding. The field force that we've been able to have offers extended to, their caliber is incredibly impressive. And so we would like to be able to leverage keeping them, but we really need additional clarity in terms of timing from the FDA before we can make that decision.

Great. And then with regards to what a year to midterm means, it's weeks to months. And that really depends on the further feedback that we get from the FDA, and we'll wait on that feedback. Great. And then will you press release once you have submitted those responses to deficiencies? So we want to provide as much information as we can to you, to investors, to stakeholders, given the unique situation that we are in with regards to the NDA for XSO5. But, you know, we also want to balance that with the fact that we are still undergoing review. And historically, we have not provided details of the back and forth with the agency during the review because, as you can imagine, it is a fluid situation and it remains a fluid situation. So we do want to balance disclosures and also expectations. So, you know, do not expect that we'll be giving you know, a play-by-play. We don't think that that would benefit the process, the India review process, with the agency. However, we do intend to update the street on any definitive developments.

Great. Thank you.

Your next question comes from Mark Goodman of SVB Leo Rink.

Hi, Ariel. I have a couple of questions. First of all, if you just simplistically think about an NDA with three sections, CMC, safety, and efficacy, has the FDA signed off on the safety and the efficacy portions, or you don't even have those signed off on yet? So if you think about it simplistically, I agree that those would be the main sections, but the process unfortunately is not necessarily a simple process. What the FDA does is as it reviews the NDA, it does ask sponsors for information which it needs for its review. And right now, the information which has been requested we've discussed, which is around CMC, and that's what we are responding to. We have not gotten any notice from the FDA on other deficiencies in other disciplines.

But your feedback from the FDA, you don't know whether they need something with respect to efficacy, whether you've got two placebo-controlled studies that are good enough.

Like, you don't know that yet, or you do know that, that you're good on that part of it. I think that when sponsors know that the FDA is fully satisfied is once they've approved the product. And before that, they are doing their job, which is to review the NDA. And our job is to respond to them.

Oh, I understand. I'm just trying to understand whether there's been a discussion about the studies.

Yeah, and the safety of that aspect, the other stuff besides the CMC. You've had any discussions there yet? Well, the FDA has been reviewing the application, so they have certainly been reviewing the efficacy as well as the safety portions of the FDA. And I think your question was whether or not they had signed off, and we don't know of any specific process whereby they sign off. on any specific aspects of the application until they have approved it. Right, of course. Maybe the better question is, have there been interactions back and forth with FDA on the safety data and the FTC data? Well, there has been interaction with the agency in all the disciplines of the NDA, as one would expect given the stage of the review. Just to flip to the CMC for a second, I had thought that CMC was okay. I thought we were okay there, and I presume that you did too. So what kind of came out of the woodwork here to surprise us? And then secondly, I forgot, I think it might have been in the Q&A in the first question, but the response was, you know, we're working to update the analytical – methods. We're still trying to figure out exactly what the FDA needs. So how can you feel comfortable that it's weeks to months when you're still not exactly comfortable with what the FDA needs? So we set weeks to months for us to complete the work that we need to complete. And then the reason why it is weeks to months or actually we said near to intermediate term That is meant to reflect the fact that we need to get more specifics from the FDA in terms of what would go into the response. And then with regards to your other question around CMC, the review is ongoing. And as part of the ongoing review, it is typical for sponsors to get information requests along the way. And it really does depend on the rhythm of the review. It depends on the particular reviewer. And so our job is we can't predict when those requests will occur or what they are. And our job is to make sure that as the sponsor we adequately respond to them, which is what we're doing. And, Eric, are you willing to help characterize what these two deficiencies are a little better? It's an analytical method. demonstrating that the manufacturing is as good as it needs to be? What exactly are you talking about here? So analytical methods relate to testing of the finished drug products. So we mean our tablets. This does not relate to the manufacturing process at all. And so you can make analytical methods more sensitive or less sensitive. You can broaden the range or narrow the range. And we have what we believe to be a pretty robust process. And you can make it more robust or less robust, more sensitive or less sensitive. And we are responding to the FDA's requests and we think that those are totally addressable and those are things that we can do. Thank you. Just one quick question on the migraine.

Can you just help us understand, did you say that one of the two manufacturing sites might not be able to be signed off on by the PDUCA date? So you're implying that one could be, and is one enough?

Do both have to be signed? I was a little confused by your comment. Thank you. Yeah, so it's a I'll turn it over to Kevin, who will respond to that. But I think it's pretty straightforward in terms of what the FDA is trying to give us up on there.

Thanks for that question. So, you know, there are obviously multiple manufacturing sites involved in the process for AXS07. The FDA notified us that one specific manufacturing location that is based in the United States is required to have an inspection prior to them as part of the review process. And then they did notify us that because of COVID-related restrictions, that may be in jeopardy of happening before the PDUFA date. So it's just this one manufacturer based in the United States that they specifically notified us of in their communication. Thank you.

Your next question comes from Vikram Purehead of Morgan Stanley.

Great. Good morning. Thanks for taking our questions. So two from our side. First, going back to, again, 05 for MDDs, I just wanted to clarify one basic question around next steps. So is the situation basically that you've now submitted questions for clarification to the agency and you're waiting to hear back, or are you preparing a submission in response to the initial feedback you got, which could take weeks to months, and then after that, submission, you'll get some clarification on, um, some more specifics around what the agency might be looking for. Uh, and then secondly, beyond oh five set a question on access 14 and fibromyalgia. So you released mentioned that NDA submissions expected in 2023. And I was just wondering if you could walk us through what needs to happen between now and then to, um, enable a filing. Thank you.

Sure. So with regards to the first question, that is correct. We have submitted clarification questions to the agency, and the reason for that is we want to make sure that when we respond, that the response is adequate and that it is exactly what they need to continue their assessment of the MDA with regards to CMC. We don't want to rush to submit a response or to do an experiment and submit and have it not be exactly what they were looking for. So you are correct. And with regards to AXS-14 for fibromyalgia, what needs to happen right now is primarily CNC manufacturing. As a reminder, AXS-14 is a new chemical entity, so we do have to synthesize the material, which we are working to do, and then also generate the stability data. So most of the work and certainly the rate determining steps in filing the NDA has to do with manufacturing.

Okay. Got it. Thank you.

Your next question comes from Ashwani Verma of Bank of America.

Hi there. Thanks for taking our questions. So I wanted to understand, like, I think there's a lot of discussion on just these deficiencies. It seems pretty complex to me. I mean, can you give us some confidence that your team or any external partners that you have will be able to navigate through this? Has your team or any regulatory consultant that you have as hired, has handled such a specific situation before? That's my first question. The second one, just on this analytical method, so would you need to redo some experiments here or anything downstream of that or... The deficiencies in the method specifically, what does that mean in terms of resolving it? Would that need to be redone or that just needs to be characterized better, the findings that you had from that experiment?

So to answer those questions, this is the reason why we are making sure that we get as much clarification from the FDA as possible. And that's what we're doing. So we want to get clarity from the FDA. And then with regards to the actual deficiencies themselves, and just if you kind of step back, so first of all, we did say that we believe that they are addressable. And we're very confident in that. But if you step back, A lot of these requests or this type of request is not unusual during an NDE review. The only reason why we're discussing it right now is because we're past BDUFA and given the unique situation. So we want to provide you guys as much information as possible that is relevant to this unique situation. But, you know, the nature of the requests themselves are probably not unusual. These are the types of requests which normally we think would come up during the review of other sponsors' NDAs during a normal NDA review cycle.

Just a quick follow up if I had like, so the fee, fee force bill is completely said, how many reps are we talking? I mean, and this is a big market, a lot of different types of prescribers, what's your approach going to be? Are you focused on prior dexamethasone prescribers or branded prescribers or any other ways to cut the market?

Yeah, I think that, so, you know, I'll speak more to the size of the cell source when we get prepared to launch. I don't want to disclose that right now, but I will tell you that we will personally promote to what we believe will be 85% of the high-value prescribers in the marketplace. And that's a very complex algorithm of determining what high-value prescribers are, but they will cover, you know, greater than 25,000 HCPs on a personal promotion basis. From a non-personal promotion basis, we will also be targeting additional HCPs.

Thank you. Your next question comes from Matt Kaplan, Leidenberg, Salomon.

Hi. Thanks for taking the question. Going into the deficiencies a little bit more in this unusual process, you mentioned that kind of the action of the FDA could be either to approve the product or potentially issue a CRL. I guess beyond that, given the unusual situation, could your answers to the CMC questions be deemed a major amendment? and would they issue you a new PDUFA date, or you're just going to be running through this process with the FDA without a new specific action date? Thanks, Matt, for the question. So when the FDA misses a PDUFA date, there is no new PDUFA date, which is issued. Okay. And I guess a question with respect to commercial preparation. Given the unique profile of O5, what's your sense or what's your feedback from potential payers at this point in terms of potential coverage and thinking about pricing?

Yes. Thanks, Matt. So, you know, I previously mentioned we've had our national account directors in the field having permitted payer discussions since about the April timeframe. And, you know, all discussions have been highly encouraging. But we will not engage in discussions, you know, formal discussions with payers until after approval and once we have a final label. In terms of pricing, we'll be prepared to reveal that, you know, at launch. But, you know, our goal is to make sure that patients receive access but that we capture the value that those product brings to market.

Thanks for taking questions.

Our next question comes from Jayton Seneja of Guggenheim.

Hey, guys. Thank you. Just maybe a couple questions for me.

Could you enter into labeling discussion prior to addressing these deficiencies, or if the FDA is okay with the clinical section, could you enter, or once you submit to CMC, once they're satisfied, only then you can enter? So that's the first question. And I understand the CMC deficiency is

you know, more analytical, more related to analytical method, but are we sure that there is no physical visit or any inspection, anything required by the FDA at this point? Thanks for the question, Yadin. The deficiencies with regards to CMC have not been characterized to us by the agency as ones that would preclude labeling discussions. Now, just to be clear, we will not be commenting on when we enter into labeling discussions, but to answer your question, these are not deficiencies which were characterized as ones that would preclude labeling discussions. And in terms of inspections, we have not been made aware that there are inspections which need to be done. prior to the approval of AXS05. And I don't know if Kevin has any information in terms of the pace or rhythm of inspections, the regular rhythm of inspections at the manufacturers that we use for AXS05. Got it. Yeah. I think, Kevin, I have a question, one more question. So, I mean, obviously you are making progress in terms of the commercial launch. Can you give some color in terms of the payer discussions? How should we think about price? Any consideration in terms of, you know, maybe good comp for us to see in the field in terms of, you know, how we should be modeling the price once, you know, once you get approved and it's launched?

Yeah, thanks, John. So, you know, consistent with what Liz just mentioned, you know, we have had some very encouraging payer discussions to date, but those have been in a permitted fashion where we specifically introduce Axum, the clinical profile, the excess of five. We will not engage in discussions, formal discussions with them until after approval and once we have the final label. In terms of price, again, I think payers do recognize an unmet need in the marketplace. They also recognize that AXS05 does have a novel mechanism of action and that the clinical benefits that the product can bring to market could be great. So in terms of price, as I mentioned earlier, the way that we'll approach it and we will be in a position to announce price at approval is that our goal is really is to make sure that patients have easy access to the product, but that we as a company capture the value that the product brings.

Thank you.

We do have time for two more questioners. Your next question comes from our mentor of William Blair.

Hey, everyone. Thanks for the questions. I may have missed it, but did you just say that the deficiencies that we're discussing today did not preclude labeling discussions? That is correct. So that is right. Right, so it begs the question that the letter that you received that stated deficiencies that did preclude labeling discussions, either they still exist or you're currently in labeling discussions. Sorry for the difficult question, but I'd love clarification around that. Yeah, so no, thank you for the question. And we do appreciate you trying to parse through the situation and what we've done and what we're trying to do is to provide you the information that we get as soon as possible after we get it. That's the information that we have received. We disclosed the prior letter and we've also disclosed now the fact that we have gotten some information on deficiencies. We don't know if these deficiencies are the ones which were previously referred to or if those deficiencies are now a thing of the past, but this is the information that we have. We're actually encouraged that we have gotten this information because that's all we've ever wanted as a sponsor is the ability to address whatever questions that there are that will help the FDA in their end-year review process. Okay, cool. Final one from me is just the NDA filing for 07. Does that carry the same analytical measures on the manufacturing level as 05 in the current filing? Kevin?

Because the products are distinct molecules with different active components, they would not carry over necessarily into the 07 application specifically.

Cool. Thanks, guys.

Your next question comes from June Lee of Truist Securities.

Well, thanks for taking our follow-up. I just wanted to clarify some questions that I've been getting from investors, which is that the analytical method relates to further characterization of the product, but not the product itself. I think that's what you said. Can you clarify what you mean by not the product itself? How you can be confident that this is not related to the product itself, or whatever that means? And the second question is,

You got the letter from the FDA, or FDA let you know about the deficiencies in August, but the nature of the deficiencies were not disclosed until late October.

Is that correct, or did that happen earlier? Thank you. So the comment around the analytical methods, so we were making a distinction between the manufacturing process and the analytical methods to which tests were the finished goods. And so the analytical process, that's what it tests. The analytical methods, that's what they test, the finished goods. And so that was the distinction. So the deficiencies do not relate to the manufacturing process itself, in other words, how the tablets are made. And then with regards to the timing that you've laid out, that is correct. Thank you.

Thank you. I will now turn the conference back over to the CEO.

Well, thank you again, everyone, for joining us on the call today. With four pipeline candidates being developed in six indications, which are either under FDA review or in late stage development, we believe that we have built the leading CNS-focused pipeline in the industry. We're working hard to bring these potentially life-changing medicines to people who live with serious CNS conditions. And we look forward to keeping you updated on our continued progress. Have a great day.

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