Axsome Therapeutics, Inc.

that design was chosen? And I guess if it's positive, would you expect to have to do a parallel study after that?

Thanks for the question. So we do anticipate that we would need two positive trials. That's the standard for any approval for any indication at the FDA. And in terms of the reason for the randomized withdrawal design, One of the challenges with neuropsychiatric indications and depression in particular is the high placebo response. So, you know, how do you deal with that? So, in the prior studies, in the prior study which we conducted with psori-amphetols in this indication, what we saw in the active arm was clearly a very pronounced antidepressant effect. What we wanted to make sure is that we're able to tease out and really demonstrate that this is a drug effect and while minimizing the impact of the placebo response. So that's the rationale behind the selection of that study design.

Okay. Thank you very much. And can I also ask, just like, Long term, how are you thinking about profitability? And does the increased conviction and ability and what that could do from a sales perspective, does profitability start to become a goal for the company? Or is the focus kind of more on sort of revenue growth?

Right now, our focus continues to be on revenue growth. So I think if you have to put things in priority order, revenue growth is number one. Then getting the cash flow positivity is two, and then profitability shortly thereafter.

Great. Thank you. Thank you. Next question is coming from Greg Subilovich from .

Good morning, guys. Congrats on all of the progress, and especially the AD agitation approval, and thanks for taking my questions. I've got questions on Ovelity, and I'm curious if you could provide some color around how we should think about this year's quarterly sequential growth given seasonality dynamics, given that while Ovelity is still growing year over year in MVD, as you get to bigger numbers, it starts slowing down, but then you've got the ADA launch. I guess, do you anticipate year-over-year growth in 2026 to be perhaps bigger than you saw in 2025? And then just a follow-up on availability, just given the ADA approval, can you tell us how you're thinking about IRA implications and how we should think about, as you add more Medicare patients, how we should think about including that in our models or not in terms of any impact there? Thanks.

I'll start with the first question around quarterly sequencing. You know, we haven't guided specifically on sales ramp over the course of the year, but as you know, Q1 is a quarter in which market seasonality comes into effect, but we believe is transitory in nature as evidenced by the early demand trends that we're seeing in Q2.

And then maybe just a little bit on the IRA, Greg. You know, at the earliest, IRA negotiations will not impact availability until 2031, obviously assuming availability meets the requirements for negotiation of being a top-spend Part D product. And it is important to note that the $8 billion that we share today contemplates any type of IRA impact. Okay. Thank you.

Thank you. Next question is coming from Brian Scorney from Baird. Your line is now live.

Hi, thanks for taking our question. This is Charlie on for Brian. So just kind of following up on an earlier question, curious how you're thinking about positioning Synosy ahead of potential Rex and Agonist launch later this year, as well as with your expansion of the Salesforce there and wrapping up the expansion of the Ovelity Salesforce. How should we think about kind of the ramp of SG&A spend throughout 2026? Thank you.

Maybe I'll take the SG&A question first. So SG&A increased this quarter primarily for four reasons. First off, we typically do see a bit of phasing of higher spend in SG&A in Q1 versus the rest of the year just on the underlying business. Secondly, we accelerated the marketing spend in preparation of approval of ADA to ensure the infrastructure was established and ready to launch in June. So we're moving along there very nicely. Thirdly, the field force expansion was actually faster than we anticipated. So we're pleased with where we are in preparation for a June launch. And fourth, we actually continue to have DTC spend for Valid in MDD. So as we think about the rest of the year, we would anticipate SG&A will likely increase in Q2, but at a slower rate than what we've seen from Q4 to Q1, and likely level out shortly thereafter. But importantly, we should note that we expect to see continued operating leverage in the P&L as top-line revenue growth is anticipated to outpace the growth that we expect to see in operating expenses.

Yeah, and regarding your question on AXS-12, obviously it's a great time for treatment developments in the narcolepsy space, and we're very excited about the potential for AXS-12 to enter this marketplace. You know, without sharing specifics around the orexins, I would just say that we're very pleased with the Phase III clinical trial results Ariel mentioned earlier, you know, significant reduction in weekly cataplexy attacks as early as week one, very safe and tolerable. and demonstrated benefits across a variety of secondary endpoints, including excessive daytime sleepiness and cognition. So we think there's a real opportunity for AFS-12 to make a difference for patients, and we'll look forward to news regarding the submission.

Great. Thank you very much.

Thank you. Next question today is coming from Madison El-Sadi from B-Riley Securities. Your line is now live.

Hey, congrats on the progress, and thanks for taking our question. A couple related to availability. Our understanding is that long-term care, formulary additions are gated by these quarterly reviews that facilities have. And so just given everything we know in terms of payer coverage, Salesforce expansion, the general profile, the landscape, Curious if there could be a bolus of AD agitation patients. And then just as a follow-up, I guess over the next, say, call it 12 months, how many prescribers do you expect may prescribe availability for both depression and for AD agitation? Thanks.

Yeah, thanks for the question, Madison. Regarding LTC bolus, I think it's difficult to predict exactly, but, you know, our team has been actively engaged with, you know, payers and LTC organizations to ensure patient access for all abilities. We'll have more to share once we get into the commercial launch. And in terms of MDD and ADA prescribing, I think it's important to note, and we shared this on our call last Friday, that we'll be calling on roughly 68,000 HCPs with our expanded sales team. And approximately half of those targets are considered high volume treaters of both Alzheimer's disease agitation and major depressive disorder. So I think that gives you some sense of the potential for ability to be used across both indications within a single prescriber or clinician's practice.

Understood. Rats again, and thanks.

Okay, the next question is coming from Rudy Lee from a researcher of mine. He's now live.

Thanks for taking my question. Just a quick follow-up to your long-term guidance of AB and OILT sales. How should we think about the uptake maybe for the relatively near term, maybe in the next two, three years, Just additional color on your key assumptions and we're going to give you confidence with the trajectory to ABN TIC sales. And secondly, just can you talk about your OUS development plan for OVALITY? Since now we already secured two indications in the U.S. Thanks.

Yeah, and thanks for the question. When you think about uptake in the next two to three years, obviously, there will be a lot to learn over the next several months as we see our expanded sales force in the market for both indications. And obviously, the Alzheimer's agitation indication will be new, so this is a new launch. And so it's hard to share specifics on what we expect the uptake to be, but we have seen strong growth in new patient starts and new writer activation within MDD, which we expect to continue. And there will be another increase relative to the Alzheimer's agitation market, which SHARE SOME COMMON TARGETS WITH MDD, BUT THERE ARE SOME DISTINCT TARGETS THAT WE'RE ADDING TO THE CALL PLAN FOR THIS YEAR. SO I THINK WE'LL HAVE MORE TO SHARE AS WE GET INTO THE ALZHEIMER'S AGITATION LAUNCH, BUT THE UPDATE TO PEAK SALES ESTIMATE WAS GUIDED BY OUR INTERNAL ANALYSIS AND ULTIMATELY THE FINAL LABEL FOR AGITATION, WHICH GIVES US CONFIDENCE THAT IN BOTH INDICATIONS, it will be increasing frontline use of the product.

And Rudy, as it relates to OUS, our primary focus is on executing a launch in ADA and successful commercialization in the U.S. while identifying the ideal partner, XUS. So as we said in the past, our plans are to partner XUS, and our primary focus is to ensure that we find a partner that shares our vision for the drug and its future. Got it.

Congrats on the progress.

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further closing comments.

Thank you, operator. Axilm today represents a singular CNS platform. With our differentiated marketed products and a broad pipeline of potentially first-in-class and best-in-class treatments targeting unmet medical needs in psychiatry and neurology, We are well-positioned to deliver substantial long-term value for patients and shareholders. We look forward to providing updates on our progress throughout the balance of the year. Thank you, everyone, for joining us this morning. Have a great day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your lines at this time and have a wonderful day. We thank you for your participation today.