Axsome Therapeutics, Inc.

Good morning, and welcome to the Axiom Therapeutics second quarter 2026 earnings conference call. My name is Kevin, and I'll be your operator for today's call. At this time, all participants are in listen-only mode. Later, there'll be a question and answer session, and instructions will be given at that time. Please note, this call is being recorded. I would now like to hand the call over to Ashley Dong, Senior Director of Investor Relations. Please go ahead, Ashley.

Thank you. Good morning, everyone, and welcome to Axiom's second quarter 2026 earnings conference call. Joining me today to discuss our results for the quarter are Dr. Herriot Tabuteau, Chief Executive Officer, Nick Pizzie, Chief Financial Officer, and Ari Maizel, Chief Commercial Officer, who will begin our call with prepared remarks. Mark Jacobson, our Chief Operating Officer, and Hunter Murdock, our General Counsel, will also be available for Q&A. Before we begin, I encourage everyone to visit the Investors section of our website to find the press release and presentation for 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 SBC 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 with that, I'll hand it over to Herriot.

Thank you, Ashley, and good morning, everyone. The second quarter was highly productive for Axome as we grew our commercial business robustly. and made important regulatory and clinical progress across our innovative neuroscience pipeline. In the second quarter, our commercial portfolio generated $218 million in net product revenue, a 46% increase year over year, driven by strong performance for Ovelity and Synose. In the quarter, we launched Ovelity in Alzheimer's disease agitation and completed the expansion of the Ovelity Salesforce. Early metrics for the Salesforce expansion and Alzheimer's disease agitation launch point to growth acceleration for Velody. Underlying demand growth for Sembravo is also accelerating, and we expect Senosi growth to continue outpacing the market, positioning us for continued strong growth across the entire commercial portfolio. Later in the call, Nick will comment further on our financials. and Ari will provide additional detail on our commercial performance, including early observations on the Alzheimer's disease agitation launch. During the quarter, we also advance our leading neuroscience pipeline of six innovative product candidates, which we are developing for 10 serious conditions. Our broad late stage neuroscience pipeline positions us to potentially file on average one new NDA each year between now and 2030, delivering potentially significant value to patients and stakeholders. Following Ari's remarks, I'll provide an update on each of these programs. With that, I'll turn the call over to Nick.

Thanks, Herriot. Good morning, everyone. I'll begin with a review of our financial results for the quarter. Revenue increased to $218 million compared to $150 million in Q2 of 2025. representing a 46% year-over-year growth. Performance was driven by Abelity with steady growth from Synosy and continued strength in prescription demand for Semravo. We recorded net product sales for Abelity of $180.3 million in the quarter. That's a 51% increase compared to the second quarter of 2025 and an 18% increase quarter-over-quarter. Senosi net product revenue for the quarter was $35.8 million, representing a 20% year-over-year growth. Senosi revenue consisted of $33.8 million in net product sales, $1.5 million in royalty revenue associated with Senosi sales in out-licensed territories, and a half a million dollars in milestone revenue. Net sales for Sembrava were $2.3 million in the quarter. Sembrava was launched in June of 2025 and had net product sales of $400,000 for the second quarter of 2025. The decrease of $1.8 million in net sales from Q1 of 2026 primarily reflects a prior period adjustment and increased utilization of our patient service program driven by underlying demand growth. As such, Sembrava gross and net discount deviated from trend during the quarter into the high 80% range. We anticipate Sobravo GTN to return to prior levels for the remainder of the year. Gross net discounts for Ovelity and Synosi were each approximately 50% for the second quarter. We continue to anticipate gross net discounts for both products to improve throughout the year, consistent with prior year trends. Turning to expenses, cost of revenue in the quarter was $13.6 million, representing 6% of total net revenue. Cost of revenue for the second quarter of 2025 was $13.4 million. Research and development expenses decreased to $46.2 million for the second quarter of 2026 compared to 49.5 million in the second quarter of 2025, which primarily reflects lower costs associated with AXS05 and AXS14. Selling general and administrative expenses in the quarter were $208.1 million compared to $130.3 million for the second quarter of last year. The increase was primarily driven by commercialization activities for Velody and Sembrado. Finally, net loss for the quarter was $51.3 million or $0.99 per share compared to a net loss of $48 million or $0.97 per share for the second quarter of 2025. Net loss in the quarter includes $27.1 million in stock-based compensation expense. Turning to the balance sheet, we ended the quarter with approximately $320 million in cash and cash equivalents. This compares to $323 million as of end of 2025. As evidenced by this quarter's financial performance, we are seeing continued improvement in operating leverage while investing behind our key commercial opportunities and pipeline priorities. Based on our current operating plan, we continue to expect that our current cash balance is sufficient to fund anticipated operations into cash flow positivity. Now I'll turn the call over to Ari with a commercial update.

Thanks, Nick. During the second quarter, we saw strong underlying demand growth across our portfolio of three differentiated medicines. In addition, during the quarter, we further strengthened our commercial foundation, positioning us to drive growth across the portfolio over the balance of the year. Beginning with Ovality. In the quarter, we launched Ovality in the Alzheimer's disease agitation market and completed the expansion of the Ovality Salesforce. I'm happy to share that early metrics indicate that these two developments are already beginning to have a meaningful impact on demand growth, positioning Ovality for continued momentum over the balance of the year. Regarding Alzheimer's disease agitation, During the first eight weeks following the launch in this indication, new-to-brand prescriptions among patients 65 years of age and older increased 126% compared to the same period in the prior quarter, reflecting expanding adoption in this patient segment. New-to-brand prescriptions represent new patients starting on Ovelity for the first time and are considered a key leading indicator of growth. While it's early days in the commercialization of alveolity and Alzheimer's disease agitation, we are excited by the initial feedback that we have received from prescribers, which includes positive anecdotal evidence of alveolity's differentiated clinical profile reflected in real-world patient experience. In particular, providers and care partners alike view the reduction in agitation symptoms and safety and tolerability profile favorably. These early experiences have reinforced our belief that Ovality has the potential to transform the treatment paradigm for Alzheimer's disease agitation, and we look forward to sharing continued progress in the months ahead. We are also beginning to see the early impact of our expanded sales organization, with overall new to brand prescriptions in the second quarter of 2026 increasing 26% compared to the first quarter of 2026. This momentum has continued into the third quarter. In addition to accelerated new patient starts, the expanded sales force activated more than 6,800 new all-velocity prescribers in the quarter, representing 21% growth versus the previous quarter, bringing the total number of unique prescribers since launch to approximately 69,000. The inflection in new to brand prescriptions and increased velocity of new writer activation are strong leading indicators of our expanded sales force investment. and resulted in market share gains for both new-to-brand and total prescriptions in the quarter. We expect these trends to continue to build in Q3 and Q4, translating into positive TRX trends and further market share penetration. Overall, total prescriptions for Avelity in the second quarter reached approximately 266,000, an increase of 34% year-over-year and 12% sequentially. substantially outpacing the antidepressant market, which grew 1% and 2% in the same time periods, respectively. In addition, availability market access continued to improve during the quarter, with coverage now at approximately 89% of total lives across channels, including 82% of commercial lives and approximately 100% of lives in the government channel. Our market access team is working closely with payers in both the commercial and government channels and we expect patient access for ability in both the MDD and ADA markets to continue to expand and evolve. Taken together, we expect the momentum from the Salesforce expansion, continued growth in MDD and uptake in Alzheimer's disease agitation to drive continued growth over the rest of the year. Of course in Bravo, demand was strong, growing 30% quarter over quarter to approximately 23,500 total prescriptions. Prescriber and patient feedback continue to be very positive, supporting our commercial strategy to drive prescription volume while improving market access to support sustained growth over time. As mentioned on our prior earnings call, based on the strong demand for Sembrava to date, our previously announced Salesforce expansion to approximately 150 sales representatives is substantially complete. Finally, following the previously announced addition of approximately 17 million lives in Q2, Overall payer coverage is now at approximately 57% of lives covered across channels, including approximately 56% of commercial lives and 57% of government lives. We expect coverage for Sembravo to further improve moving forward. Sanosi delivered another quarter of durable growth, with approximately 61,000 total prescriptions written during the quarter, representing 14% year-over-year growth and 8% sequential growth, compared to a 1% decline and 2% increase for the weight-promoting agent market in the same periods, respectively. More than 17,000 clinicians have now prescribed Synose since launch, and we continue to maintain broad payer coverage of approximately 82% of lives covered across all channels. Overall, the underlying commercial performance in Q2 reflects positive momentum for Axone's portfolio of differentiated CNS products. Acceleration of availability in NDD and Alzheimer's disease agitation, continued market penetration for Simbravo and migraine, and consistent growth from Synose and EDS associated with narcolepsy and OSA position Axone for a strong second half of 2026 and robust growth in the years ahead. I will now turn the call back to Herriot.

Thank you, Ari. We are excited by our innovative neuroscience pipeline, which targets high medical needs Novel Indications, First-in-Class Mechanisms of Action, and Best-in-Class Profiles. I'll now review the recent pipeline progress and discuss key upcoming clinical and regulatory milestones. In the quarter, the FDA accepted our NDA submission for AXS-12 for the treatment of cataplexy in narcolepsy, with a BDUFA target action date of May 1, 2027. Based on its differentiated mechanism of action and resulting clinical profile, AXS-12 has the potential to provide a meaningful addition to the treatment armamentarium for patients living with narcolepsy, if approved. For AXS-05, the next indication under development is smoking cessation. We are on track to initiate our planned Phase 2-3 trial in this indication this quarter. Exploring the full clinical potential of XSO5 remains a top priority for us based on its unique pharmacology, which is potentially applicable across multiple neuropsychiatric disorders. Let's all re-empt it all. Our clinical programs across four new indications continue to advance. As a reminder, the new indications being explored are ADHD, Binge Eating Disorder, MZD with Excessive Daytime Sleepiness or EDS Symptoms, and EDS associated with Shift Work Disorder. All in all, we currently have five phase three trials underway across these indications. In ADHD, we recently initiated the FOCUS-2 and FOCUS-3 studies of psori-amphetol in children and adolescents with ADHD. These studies use a parallel group design with a primary endpoint of change from baseline to week six in the ADHD grading scale. These two studies, if positive, together with the previously completed positive focus phase three trial of psorianvital in adults would form the basis of an NDE filing for psorianvital in the treatment of ADHD. In binge eating disorder, Our ENGAGE Phase III trial continues to enroll, and we anticipate top-line results from the study in the fourth quarter of this year. Our CLARITY Phase III trial of psori-invertal in MDD with ADS and our SUSTAIN Phase III trial of psori-invertal in ADS associated with the shift work disorder are also advancing. For AXS14, which we are developing for fibromyalgia, enrollment in our FORWARD Phase III trial continues to progress. The forward trial, if positive, together with the previously completed positive phase 2 and phase 3 trials, would support an NDA filing for AXS14 for the treatment of fibromyalgia. With AXS20, our first-in-class selective PDE10A inhibitor, we are making good progress in our chemistry, manufacturing, and controls activities with the goal of initiating a phase three trial with this molecule in schizophrenia. We are also advancing phase two enabling activities for AXS17, our GABA subtype selective PAM, which we are developing for epilepsy. In summary, we are excited by the programs in our leading neuroscience pipeline. Combined with building momentum in our existing commercial business, these programs targeting areas of unmet medical need lay the groundwork for continued growth and value creation for patients and stakeholders. I will now turn the call back to Ashley.

Thanks, Herriot. This concludes our prepared remarks and we'll now begin the Q&A session. To allow enough time for as many questions as possible, we kindly ask that you limit yourself to one question. Operator, please open the line.

Certainly. will now be conducting a question and answer session. If you'd like to be placed in the question queue, 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 if you'd like to remove your question from the queue. As a reminder, please ask one question then return to the queue. Our first question today is coming from Leonid Temeshet from RBC Capital Markets. Your line is now live.

Hey guys, thanks for taking my question. Just one maybe on the Alzheimer's agitation launch, specifically as it relates to long-term care. I guess, can you talk about the trends that you're seeing in the long-term care? I guess the enthusiasm there, and then given that it's a new area that you're launching into, sort of any successes or challenges that you're seeing there? Thanks.

Thanks, Leo, for the question. As we stated earlier on the call, we're just eight weeks into the launch. We're really encouraged by some of the early data we're seeing. The early patient experience has been very promising. We're seeing strong growth in new-to-brand prescriptions in patients age 65 and older. And that feedback is consistent from both the community and long-term care settings. So obviously, as we get further into the launch, we'll be able to share some additional details around specific settings of care, but we've been really encouraged by what we're seeing across both LTC and community.

Thank you. Our next question is coming from Malcolm Hoffman from BMO Capital Markets. Your line is now live.

Hi. Thanks for taking our question. You highlighted some pretty strong growth in NBRX for availability in the 65-plus patient group there. Can you maybe break this out further to indicate how much of this may be driven by agitation versus MDD expansion as well? Thanks.

Yeah, thanks so much for the question. You know, as we mentioned on the call, NBRX growth was very positive, 26% versus Q1. We are seeing meaningful increases in both MDD and Alzheimer's disease agitation, which we would expect to continue moving forward.

Thank you. Our next question is coming from – I'm sorry.

Go ahead.

Our next question is coming from Ash Permo from UBS. Your line is now live.

Hey guys, thanks for taking my questions. Congrats on the progress here. Maybe just on like Alzheimer's agitation, can you talk about the level of sampling that you need to do early in the launch? And as the time progresses, would that gradually be lower? Is this sampling going to be more or less than the MDD launch that you did? Just help us understand so that we can correlate to data that we're seeing it out and at the third party sources, thanks.

Yeah, as it relates to sampling, particularly in the community setting, sampling is important to gain trial with patients, and we've been committed as an organization to ensure that patients are appropriately titrated based on the approved dosage and administration. I think it's a little too early for us to indicate how sampling will change over time, but right now we're very pleased with the strong demand for samples, and it's been applauded by the clinical community in order to get patients started effectively and to give them the best chance for the clinical profile that we saw in our Phase III clinical trials.

Thank you. Next question is coming from Rudy Lee from Wolf Researcher. Why does that lie?

Thanks for taking my question. For ADA, can you provide more color on the capture rates of like Acuvia of the prescription data for the titration package and what additional key commercial metric you will be monitoring to track the progress. Thank you.

Yeah, I would say on the capture rate for the titration pack specifically, there's really limited data, so we'll learn more as we get further into the launch. In terms of ongoing performance data, I think, Obviously, sharing information about adoption or utilization with patients who are 65 years and older was an important signal for this particular call. And as we get more data into the launch, I think we'll update based on the most relevant trends related to the launch.

Thank you. Our next question is coming from Mark Goodman from Learing Partners. Your line is now live.

Nick, can you talk about where you think Avelity grows to NETs will settle out in, let's say, two years after both of these indications are kind of going? And just for depression alone, what first line, second line, what percentage are we up to now? Thanks.

Sure. Hey, Mark. So maybe first, where we were for Avelity and GTN for This quarter, we were around 50%, as I shared in the opening remarks. That's obviously with the increase in covered lives and also with improving the quality of coverage, the first line or first switch. As you alluded to, in a couple of years, we anticipate Medicare to become a higher proportion of scripts compared to commercial. What we've shared longer term is that we would anticipate GTN to remain in the 50s. And we'll be able to get better guidance probably towards the end of the year as we see this launch grow in ADA.

Yeah, and as it relates to first, second line use in this quarter, we saw about more than half of patients, 56%, were treated in the first or second line setting. As we've shared previously, we don't have a particular percentage in mind. We know that Ovelity has been effective in patients as early as treatment naive and as late as treatment experience. And so we're very comfortable with what we've seen over the past few years, and it's certainly supporting continued growth in both MBD and Alzheimer's agitation.

Thank you. Our next question is coming from Ami Fadia from Neiman Company. Your line is now live.

Hi, good morning. Thanks for taking my question. Maybe if you can talk about some of the market dynamics with Sembravo and talk about the evolution of the adoption rate there and how you see that progressing over the coming months. Thank you.

Yeah, thanks for the question. I mean, we're very pleased with the underlying demand for Simbravo. You know, as we stated earlier, it grew 30% versus Q1. And we're receiving very positive feedback from both patients and providers around Simbravo's clinical profile and impact on patients. We expect that to continue. We mentioned that our sales force is expanding to approximately 150 sales representatives. that will enable us not only to call on higher decile headache specialists with more frequency, but also continue to expand and penetrate the primary care setting, which has been a key source of growth over the past several quarters.

Thank you. Our next question today is coming from Andrew Tsai from Jefferies. Your line is now live.

Hey, good morning and congrats on the quarter. This is Matt Barkas on for Andrew Tsai. I just want to ask, can you confirm what the exact percentage of your Alzheimer's agitation scripts are samples right now? And then since samples tend to run out in two to three weeks, any patient in June, July, a sample should be converting to an actual patient by now, you think? So is the total availability weekly script growth in the last couple of weeks representative of the weekly growth profile that could be going forward? Or would you absolutely expect a faster cadence in August and September compared to June and July?

Yeah, thanks for the question. We don't share specific details regarding sampling as a proportion of overall demand, but we've been very pleased with the overall demand for samples in the community setting. And again, think that that's a very important aspect of the launch to support effective titration for elderly patients. In terms of weekly growth, as we mentioned, you know, we've got eight weeks of data that we're sharing today. We expect to learn much more in the coming months related to the launch, but we've been very pleased with the early indicators.

Thank you. Our next question is coming from Pete Shrivopoulos from Canterbury Shroud. Your line is now live.

Good morning. Congrats on the quarter, and thank you for taking my question. For AXS12 riboxetine, There was the first approval of an orexin-2 receptor agonist last week. How do you think about the underlying commercial opportunity for riboxetine in the narcolepsy market that has this new class of drug approved? Also, have you had discussions with payers around the profile of AX12 and possible pricing?

Great. Thanks for the question. I'll take the first part of that question, and Ari can take the second part. If you look at the narcolepsy market, we know that it is characterized by a lot of heterogeneity in the narcolepsy patient population. So more treatment options are better for patients. We're excited by the potential for AXS12 to provide a new and differentiated treatment option for patients living with narcolepsy. If you think about it mechanistically, it works on the orexin pathway. Orexin stimulates the locus coeruleus to produce norepinephrine, and AXS12 also stimulates norepinephrine production. What we like about AXS-12 clinically are a few things. One, it works very quickly. We have onset of action, which is demonstrated at one week. Secondly, the FSC is durable. We have data out to six months. And if you look at the side effect profile, it is very favorable. You combine that with the first-in-class mechanism of action for narcolepsy, and also you look at the clinical data which shows that there is the potential to affect EDS as well as cognition so we're very excited by the potential to provide a new treatment option for patients and we think that that will be welcome in the marketplace.

Yeah and regarding your question about market access we've had very productive conversations with payers as they're learning more about AXS-12 and obviously there's a lot of interest in narcolepsy. We won't comment on pricing until closer to the launch but We feel very optimistic about the potential for patient access for AXS-12.

Thank you. Next question today is coming from Ram Sivaraju from HC Brainwraith. Your line is now live.

Thanks so much for taking our question. Congrats on the quarter. Just wanted to see how you're thinking about the relative positioning of balapodect in schizophrenia. and if you are thinking about specific treatment combinations, positioning as adjunct treatment versus standalone, and what the prospects are for applicability of this drug in neuropsych indications beyond schizophrenia down the road. Thank you.

Sure. Thanks, Ram, for the question. We're really excited by the prospects for Bolivadec in schizophrenia. Right now what we're doing is we are conducting chemistry manufacturing controls activities to enable the start of a phase three trial in schizophrenia. So stay tuned. That work is well underway and that is a priority for that program. Other indications that we're looking at are Tourette's Syndrome. So we've stated that we do intend to initiate a phase three trial, a phase two trial in that indication also. That molecule and the clinical programs are progressing. As it relates to how it would be used, either as monotherapy or with other products, it's too early. We want to do the experiment, and that is the Phase 3 trial. We are encouraged by the results of the Phase 2 trial, which was conducted in this patient population, which showed a very significant treatment effect. If you look at the product as well as the favorable side effect profile, which dovetails very nicely with the unique mechanism of action of the product.

Thank you. Our next question today is coming from David M. Selim from Piper Salmon. Your line is now live.

Thanks. So on AD agitation, and I know these are early days, but do you have a good read regarding how the drug is being used relative to reuptake inhibitors? Are you seeing usage in frontline or downstream of reuptake inhibitors that historically have been used off label? in AD agitation or maybe a mix of both. Just wondering if you have a sense of where the usage mix is falling again in these early days. Thank you.

Yeah, thanks for the question, David. I think the data is limited at this point regarding, you know, where patients are coming from, if they're switching from SSRIs, SNRIs, atypical anticytotics, and the line of treatment. We'll learn more as the launch progresses. I would say in general, the anecdotal feedback we're getting is that the drug is working per the label, meaning that we're seeing rapid onset of action, a reduction both the severity and frequency of symptoms, and the safety tolerability profile has been viewed favorably by both HCPs and care partners alike. So I think we'll learn more in the coming weeks and months about line of usage and where the patients are coming from. But we're very pleased with the early response we're hearing.

Thank you. Next question is coming from Jason Gerberry from Bank of America. Your line is now live.

Hey, guys. Thanks for taking my question. Mine sounds like some impressive physician or prescriber expansion metrics, I think plus 6,500 I think I heard. That, I guess, breadth of prescriber expansion, how much of that is just neurologists, someone who's maybe more of a unique prescriber to ADA versus, say, primary care type of prescriber that might be prescribing availability across both indications? I don't know if you have a sense of as you're seeing that prescriber base expand, if it's more just breaking into the newer prescribers unique for ADA or if you're getting prescribers who could potentially drive growth in both indications. Thanks.

Yeah, thanks, Jason. I think for the Q2 data, it's largely related to our Salesforce expansion, and we're very pleased with those early signals as it relates to new writer activation and obviously NBRX or new-to-brand prescription growth, which largely is coming from the Salesforce expansion and predominantly from growth within the MDD indication. So for this particular quarter, I would say, you know, neuros may not be representative necessarily. Primary care is the predominant growth driver within Q2 data specifically. Obviously, as the launch progresses in Alzheimer's agitation, we would expect to see more specialists adopt. But for this particular quarter, I would say that really nice growth in the psych specialties, but faster growth within primary care.

Thank you. Our next question is coming from Sean Laman from Morgan Stanley Investment Management. Your line is now live.

Good morning. Thanks for taking my question. I hope everyone's well. Just thinking to your peak revenue assumptions for availability, which of these would have the greatest impact among prescriber activation, long-term care penetration, treatment duration, payer access, and market expansion into previously untreated patients? Which has the greatest sensitivity?

Yeah, thanks for the question. I think all of those things are important. Obviously, we'll be focused on all aspects, you know, in accelerating new writer activation. I think new-to-brand prescriptions are a really important leading indicator of long-term growth potential, so that's a key area of focus. As we've demonstrated, our ability to expand market access and payer coverage for our brands has also been very positive So I would say it's difficult to pick just one of the elements that you're describing, but we, from a commercial perspective, we're focused on improving execution across the board.

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

Hey, good morning, everyone. Thanks for taking my question. I was hoping you could help us think through a little more on the sampling impact in the early days of the Alzheimer's agitation launch. Are these free samples at point of care? Is this primarily a coupon card that's issued at point of care or online and turned in at the pharmacy that covers the full cost of treatment? Just trying to think, would it be reasonable to assume most of the NBRXs and Alzheimer's agitation right now are free samples? And for a Medicare patient, would the goal be to have them on commercial at the first refill? Like, do you see sampling as a bridge to securing Thank you, Brian.

Sampling, when we refer to sampling, we're primarily talking about free samples, a trial offer that is provided to community-based settings where the clinicians are able to give a sample to a patient or care partner during an office visit. It's an important aspect of any launch in order to encourage trial and to really give early patient experience with the product. As you can imagine, in the Alzheimer's population, there's heightened sensitivity just to the patients and safety tolerability aspects. So this gives them a chance to see how the drug performs. in advance of a first prescription. We expect to continue to sample as appropriate. It's been applauded by the clinician community primarily because it allows the patient to go home with the titration doses in order to get up to steady state on the maintenance dose when they're home. So, I think we'll have more to share down the road as we see more data related to sample conversion. But I would just say that samples are not prescriptions, so they're not showing up in the BIQ via data. That's an important factor as you think about it.

Thank you. Next question is coming from Joseph Combs from TD Calendars. Your line is now live.

Hi there, good morning, and thank you for taking my question. Maybe on binge eating disorder, can you comment on the clinically meaningful result that you're looking for later this year on reduction in episodes, or is it just that SIG and placebo response in binge eating disorder studies can sometimes be reasonably high, especially if the patient population maybe isn't severe enough. So can you comment on your overall level of comfort with the patient population that you did enroll in this trial? Thank you.

We're very comfortable with the patient population. We think that we designed a study and we were enrolling patients that are appropriate to be studied in a clinical trial in binge eating disorder. And it relates to bogeys. We don't have any, so we designed a study. We powered it for statistical significance, and that's what we're looking for.

Thank you. Next question is coming from Ben Burnett from Wells Fargo. Your line is now live.

Hi, good morning. I also wanted to ask about Avelity and the new-to-brand growth rate that you mentioned, the 26% quarter-over-quarter. Just wanted to see if we could get maybe a little bit more context for this number. Like, how does this number compare to the prior period in Q1? And just based on what you're seeing, what kind of growth should we sort of be thinking about in Q3? Thank you.

Thanks for the question. So regarding the new-to-brand growth rate, I think one thing that could be helpful, you know, in the first quarter, we saw essentially equivalent growth from both the total prescriptions and a new-to-brand prescriptions perspective. In Q2, we saw a step up in growth, 26% with new-to-brand prescriptions and 12% for total prescriptions. I think that's a strong signal of the impact of our Salesforce expansion in the quarter. and we would expect that to continue to build into the second half of the year.

Thank you. Our next question is coming in from Greg Savanavage from Mizzou Home Securities. Your line is now live.

Hey, good morning. Thanks for taking my questions, my question. It's really related to how we should all think about Alzheimer's disease agitation and uptake there. Trying to get a sense of if you could provide some color on how we should think about kind of the smoothness of the uptake or do you anticipate that whether it's due to the Salesforce expansion or just greater awareness that there will be a sharp inflection, whether there are you know, formulary, you know, approval dynamics, anything that could give us a better sense of how we should think about the uptake over the next several quarters or a year for that matter. Thanks.

Yeah, thanks, Greg. I think a couple of points I'd point to, you know, number one is we expanded the sales force and in the quarter we saw meaningful acceleration in new brand prescriptions and new writer activation. As you know, with eight weeks of launch data and Alzheimer's agitation, the majority of that growth came from MDD. We expect MDD to grow as Alzheimer's agitation launch is ramping up. And I think we'll have more to say, obviously, with more data on the Alzheimer's launch. The early indicators are very promising. I think it's premature to say exactly what the inflection will look like, but the early signals that we shared earlier, including the NBRX The next question is coming from David Holmes from Deutsche Bank. Your live is now live. Hi there. Thanks for taking my questions. So I want to ask a little bit about any, let's say, qualitative commentary.

You may be getting from your field force about how docs are thinking about the decision for a branded product in Alzheimer's agitation. So obviously there is the Rick Salty is the other approved product out there. And so any color commentary on how docs are approaching mobility versus Rick Salty would be helpful. And then are you hearing anything in terms of step edits or prior authorization that payers are asking for for ADA? Thank you.

Yeah, thanks, David. I think, first of all, there's still significant need for provider education in the Alzheimer's disease agitation market. And this is a market that did not have any approved products just a couple of years ago. And so there's still some education required, which we've been really proud to be a part of. Treatment intervention has often been reserved for more severe forms of agitation, particularly in primary care. And so that's been a point of education. regarding the benefits and rationale for earlier innovation. As it relates to branded products, I think ultimately providers want to help patients, and there has not been anything approved with this type of profile historically, and so there's a lot of interest in learning more about the clinical profile, both from an efficacy, safety, tolerability standpoint, and the leading indicators, I think, are very promising in that regard. From an access standpoint, we're really pleased with the coverage that we had at launch, 100% coverage in the Medicare channel. More than 75% of patients do not require a PA. Of course, PAs can still pop up, depending on the patient's coverage. In terms of step edits, by and large, we're very pleased that patients will gain access to Alvelity. based on their prior treatment experience or based on the coverage that they have. And so all of those things really point to continued progress in the launch moving forward, and we'll obviously share more updates as we get more data moving forward.

Thank you. Our next question is coming in from Yacht Instant Asia from Guggenheim. Your line is now live.

Hi, this is Eddie Onfriot, and thanks for taking our question. So acknowledging it's still very early, what are prescribers telling you about early patient response and continuation on ability in ADA? Are you picking up any differences by prescriber setting just in terms of how they're monitoring or plan to monitor and follow up with patients as they get treated?

Thanks. Yeah, thanks for the question, Eddie. I think the response has been really consistent regardless of setting of care or specialty. and that is that availability has been effective at reducing both the frequency and severity of agitation symptoms with a favorable safety tolerability profile. We'll obviously learn more as the launch progresses, but so far it's been very consistent both in terms of specialists as well as setting of care.

Thank you. Next question is coming from Madison Alsati from B. Reilly Stewardage, Orlando, Iowa.

Good morning, guys. Thanks for taking your question. Maybe on the 2Q revenue, how much of that reflects any channel stocking versus dispensed demand? If you could just help, sorry if I missed it, and if you could just help clarify the underlining operating cash burn. if you stroke working capital and everything away. Just asking in the context of your past to break even. Thanks.

Sure, Madison. So first off, the full revenue this quarter was related to demand. There was no stocking at the end of the quarter. We continue to be roughly at two weeks of inventory on hand, so no change as it relates to that. If you take a look at our cash burn for the quarter, it was somewhere in the neighborhood of $24 or $25 million taking the net loss and backing out. The majority of the non-cash loss is related to stock-based comp, more than half of that. So you're in the neighborhood of the low to mid-20s from the cash burn, and What we've shared is that our SG&A for the remainder of the year is we would have anticipated to essentially plateau to where we are this quarter in Q2 of $208 million as we're fully staffed and built a foundation for Abelody as well as Simrava. R&D will continue to take up as we've commenced the ADHD trials. Importantly, we should see operating leverage continue in the back half of the year. We saw that this quarter with revenues growing at 14% and OPEX growing at 7%.

Thank you. Our next question is coming from Miles Minter from William Blair. Your line is now live.

Hey, Dean. This is John on for Miles. Thanks so much for taking our question. I was wondering if you can give us any updated plans for the DTC campaign for Alveolity with the ongoing launch and AD agitation. Thanks.

Thanks, John. We evaluate, obviously, DTC is an important part of our marketing mix, and we've been pleased with the impact of our direct-to-consumer investments across really all of our brands, but Abelity specifically over the past year or so. Given that it's still only eight weeks into the launch, we're assessing the potential for a more substantial VTC effort. Right now, we are investing in consumer marketing, primarily focused on care partners, but the potential for something more broad-reaching like TV or video advertising is something that we'll continue to evaluate as the launch progresses.

Thank you. We have 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.

Our excellence business advanced significantly in the second quarter. Our commercial strategy is translating into growing adoption of our medicines. Our pipeline continues to progress toward multiple milestones with substantial value creation potential. And our strong financial position allows us to continue investing behind our strategic priorities to maximize the long-term potential of our portfolio of medicine. We are excited for the remainder of the year and look forward to sharing updates on our progress. Thank you all for joining us and have a great day.

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