Axsome Therapeutics, Inc.

Good morning and welcome to the Axiom Therapeutics third quarter 2025 earnings conference call. My name is Daryl and I will be your operator for today's 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 this call is being recorded. I would now like to hand the call over to Darren Oplin, Senior Director of Corporate Communications. Please go ahead.

Thank you, Daryl. Good morning, everyone. Thank you for joining us for ACTSOM's Third Quarter 2025 Earnings Conference Call. With us today are Dr. Ariel Tabito, our Chief Executive Officer, Nick Pizzi, our Chief Financial Officer, and Ari Maisel, our Chief Commercial Officer, who will begin our call with prepared remarks. Marcus Jacobson, our Chief Operating Officer, and Hunter Murdoch, our General Counsel, will also be available for Q&A. This morning, to today's call. Please note that today's discussion includes forward-looking statements regarding our financial performance, commercial strategy, and operational plans, including research, development, and regulatory activities. These statements are based on current expectations and assumptions and are subject to risks and uncertainties that may cause actual results to differ materially. Please refer to our SEC filings, including our quarterly and annual reports, for a description of these and other risks. You are cautioned not to rely on these forward-looking statements, which are made only as of today, and the company disclaims any obligation to update such statements. And now, I'll turn the call over to Ariel.

Thank you, Darren, and good morning, everyone. Axiom continues to lead in CNS innovation, driven by disciplined execution and a clear focus on sustained growth and value creation. In the third quarter, we delivered strong revenue growth with total revenue of $171 million across our three marketed products, representing a 63% increase year over year. Ovality continues to gain traction as a differentiated treatment for major depressive disorder, driven by strong underlying demand. We're pleased with the pace of Ovality's performance, which is tracking well against our long-term expectations and underscores the significant opportunity for continued growth ahead. The NOSI remains on a steady trajectory, with year-to-date sequential growth nearly double that of the same period last year, a testament to the product's durable performance and expanding adoption. And Bravo completed its first full quarter of commercial launch in Q3. Our focus now is to continue strengthening the foundation for long-term success by broadening patient access and driving awareness with clinicians. Nick and Ari will speak in more detail about our financial and commercial performance and the strategic execution driving momentum across Axiom's portfolio. Beyond our continued commercial growth, Axiom's R&D engine is advancing a robust pipeline of late-stage programs with the potential to deliver transformative therapies for patients and significant value to our shareholders. Over the coming months, we expect meaningful activity across our late stage programs, including two NDA stage programs and multiple registrational trials underway or initiating. I'd like to start with our top priority areas in psychiatry and neurology, Alzheimer's disease agitation, narcolepsy, and ADHD. These are areas where we see substantial opportunity to transform patient outcomes leverage our commercial infrastructure, and unlock significant value. First, we are pleased to share that we have submitted our supplemental NDA for AXS05 and Alzheimer's disease agitation, and we look forward to announcing the FDA's decision on acceptance of the filing. This submission is an important milestone for AXS05 and for the millions of patients and caregivers affected by this serious and underserved condition. The addressable market for Alzheimer's disease agitation is substantial, and the unmet need is high with currently only one product approved. AXS05 represents a first-in-class mechanism of action that has the potential to set a new standard in the treatment of AD agitation. Work is already underway to efficiently scale our commercial platform to deliver an impactful launch if approved. As a reminder, We are also developing AXS05 in smoking cessation, and we are on track to initiate a Phase 2-3 trial in the syndication this quarter. Our next pipeline priority area is narcolepsy. We continue to target the submission of our NDA for AXS12 for the treatment of cataplexy in narcolepsy in the fourth quarter of this year. AXS12 represents a highly differentiated opportunity to address critical gaps in current treatment. Up to 70% of patients suffer from cataphylaxis, and many continue to experience inadequate relief or poor tolerability to existing treatment options. We are excited about AXS-12's potential to make a meaningful difference for patients living with narcolepsy. We also like its strategic fit with our existing sleep franchise, which we anticipate will enable highly efficient and synergistic launch if approved. For ADHD, Sol-Re-Infratol has demonstrated positive results in adults in the FOCUS Phase III trial completed earlier this year. The next step is the Phase III trial in children and adolescents, which we plan to initiate in the fourth quarter of this year. If successful, this indication could substantially expand the opportunity for Sol-Re-Infratol beyond its currently approved indications. As a reminder, we are also developing Sol-Re-Infratol in three additional indications. MDD with excessive daytime sleepiness, binge eating disorder, and shift work disorder. For MDD, we anticipate the initiation of a phase three trial in adults with MDD with excessive daytime sleepiness this quarter. Next year, we expect top line results from the ongoing ENGAGE phase three trial in binge eating disorder and the SUSTAIN phase three trial in shift work disorder and we look forward to providing progress updates in the near future. Turning to AXS-14, we are finalizing preparations for our planned phase three trial in fibromyalgia, which we expect to launch before year end. These milestones highlight the continued expansion of Axone's leading neuroscience pipeline, spanning multiple psychiatry and neurology indications with significant unmet medical needs and substantial long-term growth potential. All in all, our portfolio of novel medicines is robust and diverse, and our late-stage pipeline is deep and rapidly advancing, uniquely positioning Axon to deliver substantial near and long-term value through multiple highly differentiated paths. With just three years as a fully integrated R&D and commercial organization, Axiom is shaping the frontier of differentiated innovation in brain health. The fundamentals of our business have never been stronger, and we are excited to continue building on this foundation to drive further growth. With that, I'll hand the call over to Nick to review our financial results for the quarter.

Thank you, Ariel, and good morning, everyone. Our third quarter performance underscores the continued momentum of Axum's commercial portfolio and the breadth of our capabilities as an organization. We continue to advance multiple innovative therapies addressing diverse and critical needs in brain health, a foundation that is driving meaningful growth across our entire business. As Ariel mentioned, total product revenues for the quarter reached $171 million, representing a 63% increase year over year. Avelity continues to demonstrate impressive growth. Net product sales for the quarter were $136.1 million, up 69% versus last year. Senosi net product revenues for the quarter were $32.8 million, up 35% versus the prior year. Senosi revenues consisted of $31.6 million in net product sales and $1.2 million in royalty revenue associated with Senosi sales in outlicensed territories. Sembravo, in its first full quarter on the market, generated $2.1 million in net sales. These results reflect our continued top-line growth and focused execution, driving increasing operating leverage across the business. Avelity and Synosy gross net discounts for the third quarter were both in the high 40% range. We anticipate that Avelity and Synosy gross net discounts will increase in Q4 to the low 50% range. Sembravo gross to net discount for the quarter was in the mid-70% range, which we anticipate will remain elevated during the launch phase. Turning now to expenses, total cost of revenue were $11.9 million compared to $8.4 million for the third quarter of 2024. Our research and development expenses of $40.2 million decreased 11% compared to last year, primarily driven by the completion of our clinical trials for psoriasis and ADHD and MDD. Our selling, general, and administrative expenses of $150.2 million increased 57% compared to last year. primarily driven by commercialization activities for Avelity, including the Salesforce expansion and our recently launched direct consumer advertising campaign, along with the commercial launch of Sembravo. Our net loss for the quarter was $47.2 million, or $0.94 per share, compared to a net loss of $64.6 million, or $1.34 per share, for the same period last year. The $47.2 million net loss this quarter includes $23.1 million of non-cash stock-based compensation expense and a $13.2 million non-cash charge related to contingent consideration. We ended the third quarter with $325.3 million in cash and cash equivalents compared to $315.4 million at the end of 2024. We continue to believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan. And with that, I'd like to turn the call over to Ari, who will now provide a commercial update.

Thank you, Nick. Q3 represented Axiom's first full quarter with three products, and our commercial team advanced efforts across multiple fronts of Axiom's commercial business, highlighted by strong performance variability foundational first full quarter for Sembravo and steady growth for Sanosi. Albelity's momentum in major depressive disorder continues to build, with strong prescription growth, increased new writer activation, and the initiation of strategic commercial investments. For the quarter, approximately 209,000 prescriptions were written for Albelity, representing 46% year-over-year growth and 9% sequential growth. By comparison, the antidepressant market grew 1% year over year and was flat versus the second quarter of 2025. Since our expansion of the psychiatry sales force earlier this year, average weekly new-to-brand prescriptions, or NBRF, have increased by approximately 35%. Our expanded team continues to drive broader and deeper engagement across prescriber segments, and we have made meaningful progress in the primary care settings. Approximately one-third of availability prescribers are primary care clinicians, and NBRXs from the primary care setting have increased by approximately 50% since the expansion. Approximately 5,000 new prescribers were activated this quarter, bringing the total number of unique prescribers to 46,000 since launch. In addition to strong demand growth, we continue to make progress with market access for availability. Commercial coverage increased from 73% to 75% this quarter, bringing total coverage to 85% of all lives across channels. Importantly, we have also contracted with a third large commercial group purchasing organization, or GPO, effective August 1st, which will support continued coverage efforts moving forward. Turning now to Sembravo. The third quarter marks Sembravo's first full quarter on the market, with early progress that is helping to establish a strong foundation for long-term growth. More than 5,000 prescriptions were written, and over 3,300 new patients started Dembravo in the quarter. Our targeted approach, including focused sales and marketing activity among headache specialists who drive the majority of branded migraine prescriptions, is effectively building awareness and driving trials. Feedback from patients continues to reinforce Dembravo's robust clinical profile. Dembravo's mosaic technology, which enables rapid absorption while maintaining a long half-life, resulting in strong efficacy, is resonating with HCPs. In a recent survey of migraine treaters, key drivers of prescribing include Sembravo's multi-mechanistic targeting of the CGRP and prostaglandin pathways, vast migraine symptom relief, improvements in patient functioning, and sustained freedom from migraine pain. We continue to make progress with Sembravo market access and coverage, with overall payer coverage at approximately 52% of all lives as of October 1st. The proportion of covered lives in the commercial and government channels is 48% and 56% respectively. We have also contracted with a second large GPO effective August 1st for potential coverage of Sembravo. We anticipate coverage for Sembravo to expand and evolve throughout the balance of the year and into 2026. And finally, Synosy delivered another quarter of strong and steady performance. with approximately 53,000 prescriptions, representing 12% year-over-year and 5% sequential growth. By comparison, the weight-promoting agent market grew 4% year-over-year and 3% quarter-over-quarter. More than 460 new clinicians prescribed Synozy in the quarter, bringing the total cumulative prescriber base to approximately 15,100 since launch. Payer coverage for Synozy remains at approximately 83% of lives covered across channels. Overall, the third quarter represented another period of strong commercial performance across Axone's growing portfolio of differentiated CNS products. With continued execution on Ovelity and Synosy and the establishment of a growth foundation versus Bravo, Axone is driving increased demand, growing prescriber and patient engagement, and expanding access to our products. We remain confident in Axone's continued growth potential and look forward to sharing future updates on our commercial progress. I will now turn the call back to Darren for Q&A. Thanks, Ari.

That concludes our prepared remarks. Darryl, please open the line for Q&A.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 to remove yourself from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, for your first questions. Our first questions come from the line of Leonid Timoshev with RBC Capital Markets. Please proceed with your questions.

Hey, congrats on the quarter, and thanks for taking my question. I actually wanted to ask on Simbravo, and... your ability to extrapolate what you're seeing in the third quarter out to fourth quarter in 2026. I guess maybe can you talk about the increased depth of prescribing you're seeing and maybe what you'd like to see on the ground before you invest more in the launch and potentially in areas of bottlenecks that are stopping additional patients from coming on therapy? Thanks.

Thanks for the question. Obviously, it's still very early in the Simrava launch, and what we're seeing so far is very positive in terms of HCP and patient response. The drug is performing as well as we expected in the real-world setting. We are, as a reminder, we've taken a very targeted and focused approach, focused on the top 150 headache centers as well as large neurology practices around the country. And our intent is to try to penetrate as many of those providers as possible. And, you know, as we observe the impact, we'll make further decisions around expansion or incremental investment for Simbravo. But at this time, you know, we're really pleased with the early response. There's still a lot of work to do, and we're in the early days. But we are, you know, really focused on increasing prescribing in our targeted clinicians. As we mentioned earlier, we've seen improvements in market access, which is also a key area of focus for us, and we'll share additional updates as the brand progresses.

Thank you. Our next questions come from the line of Mark Goodman with Lyric Partners. Please proceed with your questions.

Good morning. This is Bazman from . Thank you for taking our question. We have a question regarding the primary care segment, which seems to be contributing more and more to the script right now. Do you see this segment as the key growth driver for Ovelity? And how do you envision growing this segment? Is it mainly through sales force expansion? Thank you. That's it for us.

Yeah, thanks so much for the question. Yes, we believe primary care is a really important specialty area for Ovelity and MDD. is largely because most patients in the U.S. present to a primary care office upon diagnosis, and many stay with primary care throughout the course of their depression episodes. As you mentioned, we are seeing very positive response in the primary care setting. It now represents roughly a third of our prescriber base. and we're seeing strong performance in terms of new patient starts as well as overall prescriptions. In terms of how do we further grow the primary care segment, part of that is just our Our focus sales force effort, obviously we've expanded the team several times, and that has enabled us to reach more primary care clinicians on a routine basis. We believe the expanded market access that we've been able to accomplish over the past couple years is also helping to ease the prescribing path for a primary care treater that may not have as many resources to support PA processing. And then, finally, our direct-to-consumer campaign, which launched in the quarter, we're seeing early positive signals in terms of patient awareness, patient requests for the product, and we expect that to facilitate further growth in the primary care setting along with the psychiatry setting.

Thank you. Our next question comes from the line of Pete Stavros. with Cantor Fitzgerald. Please proceed with your question.

Hello, and congrats on the quarter, and thank you for taking my question. You know, there's a clear distinction in the clinical profile of AXS05 versus antipsychotics. You know, given the differences in clinical data for Alzheimer's agitation and the mechanisms, you know, what are your expectations for ability adoption if approved? And, you know, how do you plan to drive uptake in the various channels? And have you identified key elements from resulting commercialization? and marketing strategy you would do differently to ensure greater uptake and success? Thanks.

Yeah, thanks for the question. Obviously, we're very optimistic about the impact AXS05 can have on the Alzheimer's agitation market. You know, in terms of our focus area, what we have seen in our early launch preparation is that there are a mix of specialties that are treating agitation. Primary care is the largest. There are also geriatric psychiatrists. neurologist, and then traditional psychiatrist. Of course, long-term care is an important setting of care for Alzheimer's patients, and our anticipation is that we'll cover all of those different specialties and settings of care with our efforts. We see a high degree of overlap between Alzheimer's agitation and major depressive disorder in terms of prescriber base, and so we'll be able to leverage our existing sales force. We see high synergies related to promotion there. And of course, we will need to invest in long-term care promotion, which is something we don't currently have, but do anticipate bringing online, you know, if the drug is approved. In terms of Rick Salty's promotion, you know, we don't typically comment on other companies and their promotional mix, but we have been, you know, following along, and, you know, they're having really nice success with Rex Salty, and so there are some learnings that we'll incorporate into our launch strategy if AXS05 is approved.

Thank you. Our next question comes from the line of Sean Lemon with Morgan Stanley. Please proceed with your question.

Good morning, everyone, and hope all is well. Yeah, I'm just wondering on the Salesforce expansion. I think you just mentioned on the call you're up to 46,000 prescribers, added 5,000. Given the bump in SG&A, I'm wondering how much capacity you think you've got in the existing Salesforce and when you might have to go again and how that ties into your thinking about the time to cash flow positivity. Thanks.

Yeah, I'll take the first part of the question. You know, we are pleased with the size of our sales force at the moment. It is driving considerable growth in terms of new prescribers as well as new patients. We've previously shared that we intend to add some additional representatives in support of the Alzheimer's agitation approval. And, you know, we have started our efforts in terms of laying the groundwork for future expansions. Although, you know, we haven't quite settled on a final number, that is something that we're looking to do early in 2026. Yeah, maybe just a little bit on the SG&A for the quarter.

This is Nick. So, in Q3, the SG&A increased slightly. That was really driven by our launch of the DTC campaign that we launched in September. Additionally, we had a full quarter of commercialization activity for Sembrava. Even with that, if you take a look at our net loss on a cash basis, we continue to improve quarter over quarter, as well as on a GAAP basis, continue to improve on the net loss. So no changes as it relates to our outlook for cash flow positivity.

Thank you. Our next question comes from the line of Ash Verma with UBS. Please proceed with your question.

Hi, thanks for taking our question. Just on the AD agitation application, can you comment on how many days passed you are after the application filing? There's some investor discussion going on whether you're past the 60 days and that's unlikely to get a priority review. And then any implications that you can draw from the government shutdown to your filing application process review and how this may play out? Thanks.

Sure. Hey, Ash, good morning. So, you know, as is our practice, we haven't disclosed the date of the submission, but, you know, the FDA typically lets sponsors know, say, up to 74 days following the submission when on a potential acceptance. We don't see any potential impact from the, you know, the shutdown for the timing. So, we'll, you know, as we said, the next update that we expect to share is potential acceptance decisions.

Thank you. Our next question comes from the line of Andrew Tsai with Jefferies. Please proceed with your question.

Hey, good morning. Great execution this quarter. Thanks for the question. Maybe shifting gears to the pipeline, you've got two phase three readouts with CINOSI for binge eating and shift work disorder. So can you talk a little bit about the study designs, what positive data would entail in order for you guys to file two more SNDAs next year or 2027? Thanks.

Sure. As it relates to binge eating disorder, it's a standard parallel group study design, and that would be the first study that we would need in order to be able to file an SMDA. So then, you know, based upon the results of that study, we would intend to initiate another trial, so we would need two studies for that. Other indications for solar infantile include ADHD, and we currently have one positive phase three trial for that in adults, and we're looking to start our second study, which would be in pediatric subjects, pediatric patients, in the fourth quarter.

Thank you. Our next question comes from the line of Ami Fabio with Needham & Company. Please proceed with your questions.

Hi, thanks. Good morning. Thanks for taking my question. My question is just sort of broader, stepping back. You've got a couple of products in the market, making your way towards cash flow positivity and several other late-stage assets. Sort of from a long-term strategic perspective, where are you in terms of your thinking around the portfolio? Are you looking to add additional assets to drive sort of operational efficiencies over the next couple of years? Or do you think that you've got enough in late stage that, you know, focuses really more on execution on those assets? Thank you.

Thank you for the question. You know, we're in a very, we're in a unique position from the perspective of, as you mentioned, we do have three marketed products. which are still in relatively early stages of launch. So there's a lot of growth ahead. And we're also very fortunate that the period of exclusivity for these products goes out into the next decade or couple of decades. So that's a great position to be in. And on the back of that, there's the next wave of products which we would, products and indications which we would expect to be approved over the next couple of years. You know, we talked about the S&D filing for Alzheimer's disease agitation and the plan, and the filing for AXS-12. And then, of course, there's AXS-14, for which we intend to launch our next phase three trial. So, all that means that, you know, we really, do not need to do anything extra as it relates to the pipeline in the near term. But that would be, you know, I think the standard approach and, you know, our approach is always to make sure that we're ahead of the curve. And so, as it relates to that, you know, we are taking the opportunity of the position that we're in to field inbound as it relates to potential additions to the pipeline, which could be complementary. So we're not going to quit while we're ahead. And we'll continue to make sure that we make very good strategic decisions as it relates to potentially enhancing the pipeline. And we're in a position whereby we can be very choosy about what we bring on board.

Thank you. Our next question comes from the line of David M. Sellem with Piper Sandler. Please proceed with your question.

Thanks. I had a question on riboxetine. I wanted to get your latest thoughts on how you're thinking of the commercial opportunity, particularly given that you'll be entering the market more or less around the same time as ovaporexin, the first erection to receptor agonists. How are you thinking about the competitive dynamics here? How are you thinking about sizing this opportunity? Just wanted to get your latest thoughts on the product. Thank you.

Yeah, so I think we'll all tackle that. One thing which is really interesting about riboxetine is its focus on norepinephrine reuptake inhibition. that is a common pathway for the orexin. So, the pathophysiology of the disease is orexin neuron loss then decreases the production of norepinephrine. And so then, so, you know, we, this is, the riboxetine works in a very logical, rational way in terms of the pathophysiology of the disease. So, We're very excited about the product profile because we know from our experience in the sleep space with Synose that there's still a very high unmet medical needs. Art?

You know, I'll just add, you know, when you look at the clinical profile that was observed in the phase three trials, you know, great advocacy in cataplexy, you know, non-stimulant daytime treatment, favorable tolerability profile, There's a lot to like about it, and what we hear from KOLs and sleep experts is that, you know, many patients require polypharmacy. There's a lot of trial and error, and, you know, even with the entry of a new mechanistic approach, we believe that there will still be significant unmet need, which creates opportunity for AXS-12 in those patients.

And maybe just one other add is, is with respect to sizing, you know, and we see incredibly high, you know, synergy, almost near perfect synergy with the current sales and marketing infrastructure that we have in place for Synos right now. So very, very, very complimentary to what's already in place. So we're excited about that.

Thank you. Our next question comes from the line of June Lee with Truist Securities. Please proceed with your question.

Hey, congrats on the strong quarter, and thanks for taking our questions. You know, your commercial execution on Synosys is quite impressive. Any idea where the demand for Synosys is coming from? Is it NT1, NT2, IH, or something else? And given your strength in combining products, any thoughts on combining, you know, with AXS-12 to address both EDS and cataphylaxis, or do you think it's just better to keep them a la carte? Thank you.

Yeah, I'll take the first part of that question. You know, we're seeing sort of the predominant growth is coming from the OSA segment. There's significant unmet need in terms of excessive sleepiness with OSA patients, and You know, it represents, you know, roughly two-thirds or so of the overall prescribing for synosy, and we are seeing very strong demand for synosy with those patients. Narcolepsy, of course, is an important component of the synosy sales mix, but what we've seen particularly over the past couple years is a greater awareness of excessive sleepiness among OSA patients. And as a consequence, we're seeing increased utilization there.

Yeah, and as it relates to your question about whether it should be an a la carte approach for AXS-12 and Synose, given how complementary the planned indications are, Our priority is to make sure that we get the product approved. That's first and foremost. So let's start with that. And that's going to accomplish our main goal, which is to provide clinicians extra treatment options. And clearly, given how the patients are treated with narcolepsy, given the varied symptomatology, probably undoubtedly there would be – patients who would receive both Synose and AXS-12. And our goal is to provide clinicians the data such that they can treat the patients in the best way that they see fit.

Thank you. Our next question comes from the line of Ram Savaraju with HC Wainwright. Please proceed with your question.

Thanks so much for taking my questions, and congratulations on all the progress. Just with respect to Simbrava, I was wondering if you could elaborate on the number of centers that you expect to target in the next wave after the initial 150 headache centers, and also if you could tell us a little bit about the timing with which you expect the DTC campaign for Simbravo to be engaged, if we should be thinking about the timeline as being similar to the timeline with which you initiated the DTC promotional activity in support of availability. Thank you.

Thanks, Ron. So, regarding the, I guess, increase in number of centers, the way to think about it is right now we are really focused on the predominant headache centers and headache specialists in the country. A future expansion would enable us to actually expand out more into the primary care market, where you might have a heavy proportion of migraine treaters. And so, right now, we feel very good about our coverage of headache centers and headache specialists, but that next wave would really be more about primary care expansion. As it relates to DTC, I think it's a little premature to talk about potential timing. If you look at availability and our timing related to our DTC launch, it really was a function of ensuring we had a strong foundation of HCP prescribers' support from a prescriber perspective. We have reached a critical mass in terms of market access, and we had a sales force size that was big enough to support the increase in inpatient requests coming from a DTC campaign. So, you know, when that might happen, obviously we're focused on execution across all fronts, and we'll evaluate as the brand progresses.

Thank you. Our next question comes from the line of Jason Gerberry with Bank of America. Please proceed with your question.

Hi, good morning. It's Dina on for Jason. Congrats on the quarter, and thank you so much for taking our question. Just on AXS05 for Alzheimer's disease agitation, could you maybe share your understanding of the clinical profile bar that's necessary for priority review under breakthrough designation? Is there a requirement that AXS05 shows efficacy benefit relative to Rick Salty? And, you know, maybe how do you think investors should think about that scenario and the read-through to the accord trials? And then just a quick follow-up on your comment on AXS05's ADA long-term care promotion. Could you just maybe detail what those efforts look like? Are there docs that are affiliated with long-term care facilities? I'd appreciate any additional color there. Thank you.

Sure. Hi. So just one thing just to share. Our base case here is always a standard review for the application. And, you know, we are eligible for a potential priority review, but our understanding is that currently the default position for the FDA for any application is standard review. And with respect to, like, quantitative efficacy bars So that's not how it works, right? So it's not a specific or, again, quantitative analysis that the agency does. So it's hard to give you anything there for what may or may not go into an analysis like that. But, again, our base case has always been standard. And, you know, I think we will, as we said, we'll keep people posted on a potential acceptance decision as I think the next, the next thing that we'd expect for the course of the review.

Yeah, and in terms of your long-term care question, it's a little different than traditional outpatient facilities where you may be calling on MDs, NPs, PAs, you know, along with office staff. In long-term care facilities, there's a significant nursing staff, pharmacy directors, medical directors. Of course, there are physicians, NPs, and PAs that will make rounds in long-term care, but they also are treating patients in the community. And so there's a synergistic effect of the community-based promotion for those clinicians that go into long-term care. So it is a little bit of a different approach, which is why we feel it's necessary to have a dedicated team focused on long-term care facilities if the drug's approved.

Thank you. Our next question comes from the line of Yetin Suneja with the Guggenheim Partners. Please proceed with your question.

Guys, one more question on the ADA. How do you think about the adcom? Is that going to be required, given that we already had one for the space with Rick Salty? Just curious to hear your thought and how you are thinking about it.

In adcom, that's something companies find out on potential acceptance decisions for FDA. So, you know, stay tuned on that.

Thank you. Our next question comes from the line of Greg Sivanovich with Mizuho Securities. Please proceed with your question.

Hey, good morning. Thanks for taking my question, and congrats on the continued success across the board, both commercially and on the pipeline. Just wanted to talk about Avelity commercially. I just wanted to revisit the gross to net and its evolution. I think you mentioned that the gross to net was in the high 40s in the third quarter. I'm wondering what led to that happening and whether there were any unique one-time events or items that contributed to that. And also just looking forward on the progress you've made with contracting, are there any other significant gains that you're looking forward to? I mean, it seems like you're at a pretty good place, but just wondering just in the future how we should think about that dynamic. Thanks.

Hi, Greg. Hey, this is Nick. Thanks for the question. You're correct. Avelity discount for the quarter improved from the mid-50s to the high 40s in Q3. So pleased with the net price improvement around Avelity. And something that did change during the quarter is that we received additional 28 million lives in Q3. And so we were able to see those lives covered in an improved fashion in first line or first switch. So improved access, improved amount of patients covered, along with improved net price from a GTN perspective. Ari, you want to take that second question?

Yeah. So I think first and foremost, we're at 85% total lives covered, which we're really pleased with. We shared on the opening remarks that we signed the third large GPO. Our expectation is to continue to add additional covered lives. Our goal is to try to get to as close as 100% as we can. Obviously, with the third GPO signed, that will enable additional covered lives moving forward. As you know, it's very difficult to predict exactly when those new PBM contracts will come online, but we do feel optimistic that There's great interest, and the team is continuing to focus on driving additional covered lives moving forward.

Thank you. Our next question comes from the line of David Hong with Deutsche Bank. Please proceed with your question.

Hi. Congrats on the quarter. Thanks for taking my questions. Just wanted to go back to the planned Salesforce expansion for ADA. Recognize that it's early days, but Could you maybe bookend or at least, you know, point us towards maybe a minimum number of reps that you think would be sufficient to execute a successful launch in that indication? And are those numbers already contemplated in your guidance for reaching cash flow positivity? Thank you.

Yeah, thanks, David. You know, the plan would be to expand the team, you know, if the drug is approved. In terms of the overall number, we're still working through that. There's obviously two pieces to it. One is, you know, are there clinicians we don't, we would like to cover that we don't currently cover with the current team and what sort of incremental headcount numbers we need to reach them. And then the long-term care area is something that we'll need to think through in terms of overall headcount needed to appropriately educate and engage with long-term care settings. So, a little early to share a specific number, but, you know, the goal is to expand the team, you know, if the XSO5 is approved, and we'll share additional updates in the future. And, David, would you mind just repeating, I think you had a question about cash flow positivity.

Yeah, whether the ADA, anticipated ADA Salesforce expansion is already contemplated within the existing guidance for cash flow positivity.

Yeah, David, Nick, absolutely. It's contemplated. We, the way that we forecast our cash is assuming that everything is positive. As it relates to clinical and regulatory outlooks and then the additional associated costs with that. So, obviously, upon the launch, you would have, you know, it would be capital intensive for the first few quarters and then ultimately seeing an ROI. So, yes, the answer is we have already included that in our cash flow.

Thank you. Our next question comes from the line of Troy Langford with TD Cowan. Please proceed with your question.

Hi. Thanks for taking our question, and congrats on all the progress in the quarter. Just with respect to availability, approximately how many quarters do you think it will take to see an impact from the recently launched TTC campaign on prescriptions? And do you think we'll see any sort of inflection in the current trajectory of prescriptions, or do you think we'll see just more of a continued gradual upward trend?

Thanks, Troy, for the question. In terms of number of quarters, it's hard to predict exactly when the most significant impact from DTC will hit, but one of the things that we're looking at is changes in our weekly new patient starts. We have begun to see an increase in new patient starts in general. You know, it's sort of 8 to 12 weeks is when we'd be looking for anything significant in terms of DTC impact. Right now, we feel like it's still early days, but we're pleased with some of the trends that we've observed, and we'll continue to provide updates.

Thank you. Our next question comes from the line of Miles Minter with William Blair. Please proceed with your question.

Hey, thanks for the question. Just the first on the third GPO contract and those P&T meetings coming online. Would you expect that commercial covered lives moving from 75% somewhere in the mid 90% to have a similar favorable gross to net impact as you saw with the 28 million lives coming online in the third quarter there? And then secondly, just given the FDA news this morning with Unicure and then George Tidmarsh obviously resigning, just anything you can say about the confidence of the FDA as you work through the regulatory process on the CETA side. Thank you very much.

Hey, Miles. I'll take the first one on GTN. I think it's too early to say where GTN will land with an additional contract now at hand. But we are pleased, as we shared, with where we are with the improvement in GTN as well as the improvement in the amount of lives covered and the formulary access. So stay tuned for where we'll land. But we will continue to negotiate in a similar fashion as we have previously, ensuring that we maintain long-term value and try to have as many patients covered as possible.

And on the FDA side, right now things are status quo for us in terms of our dialogue and interactions across the various divisions that we engage with.

Thank you. Our next question comes from the line of Madison Alsati with B. Reilly Securities. Please proceed with your question.

Hey, good morning. Thanks for taking our question. Congrats on the quarter. On Ovelity and Synosy as well, but more so Ovelity, are you seeing per-prescriber activity trending upward? Just trying to kind of get a sense of how much growth here is sensitivity to promotion versus More organic growth. Obviously, the sensitivity to promotions is great, but my sense is that there's also some organic growth here as well. If you could just comment and then maybe a follow-up.

Yeah, thanks for the question, Madison. We are, I guess, the way that I would recommend sort of thinking about the growth is, you know, it's a function of two things. Productivity among existing writers, so the number of prescriptions per existing writer, and then our ability to add additional new writers into the prescriber mix. And for both brands, we're seeing those things come to fruition, which I think is a testament to the impact that these medicines are having on patients' lives, the positive reinforcement that these clinicians are hearing from their patients, and our team's ability to engage with them and educate them on a routine basis. So those are things that we'll continue to look to drive moving forward.

Got it. Understood. And then, secondly, so we have four phase three trials planned to initiate this quarter. Just wondering on the cadence of those, should we think of these as almost parallel launches, or will these kind of come in a sequence throughout the remaining quarter? Thank you.

Yeah. For phase three trials launching, there are a lot of moving parts from an operational perspective to make sure that that happens. So it's very unlikely that they're all going to happen on the very same day. So, you know, do expect, you know, a natural, you know, cadence. It's nothing that we're preplanning. However, you know, we are working towards and are on track for the initiation of those studies in the fourth quarter.

Thank you. Our last questions will come from the line of Benjamin Brett with Wells Fargo. Please proceed with your questions.

Hey, guys. This is Craig on for Ben. So just a couple from us here. So given your successful track record of getting products through the finish line, I'm curious, can you provide a little bit of color of how your regulatory interactions in regards to the SNDA for AXS and ADA has maybe differed from some of those past programs? And I guess second question, in regards to narcolepsy, I feel like we're seeing a lot of estimates of the epidemiology of those indications kind of expanding and expanding further. So, you know, out of curiosity, what do you guys think is driving that? And are you seeing growth in IAH, NT1, and T2, any one particular area? Yeah, any color there would be helpful. Thank you.

I'll take the first part. So, it's ordinary course at the moment based on where we are and, you know, in the cycle on terms of the submission for AXS-OV and AD agitation.

Yeah, and, you know, from an epidemiological perspective for narcolepsy, you know, you've got to look at the surveys that are done and the quality of those surveys However, one aspect of the market that we've always pointed to is the fact that in this orphan indication, there is still a large percentage of patients who, one, have remained undiagnosed in the past, and secondly, who are treated. So certainly, as there is more interest in the space, as more products are being developed and coming to market, one would expect that there would be an increase in awareness, and maybe that's what you're seeing. Anything that you would add, Ari?

No, I think, you know, you mentioned, you know, NT1, NT2, IH. I think that there's a lot of symptomatology overlap in different formalized diagnoses, which may, you know, muddy the waters a little bit. But from our perspective, you know, we feel good about our current estimates, which is around 185,000 people in the U.S. suffering from narcolepsy. And, you know, that's what we're building our plans around.

Thank you. There are no further questions at this time. I would now like to hand the call back over to management for any closing comments.

Thank you. And thanks, everyone. Thank you to everyone for joining us this morning. As we've highlighted today, Axiom delivered another strong quarter. We continue to drive robust growth across our commercial portfolio, and we are well positioned to deliver significant long-term value through our advancing pipeline. We look forward to sharing our continued progress over the coming months. Thank you.

Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.