Axsome Therapeutics' Q3 2025 Earnings Call: Contradictions in Sales Force Expansion, Gross-to-Net Discounts, and DTC Campaign Timing for Auvelity and Sembravo

Date of Call: None provided

Financials Results

• Revenue: $171.0M total product revenues, up 63% YOY; Auvelity net product sales $136.1M, up 69% YOY; Sunosi net revenues $32.8M, up 35% YOY (includes $31.6M net product sales + $1.2M royalty); Sembravo net sales $2.1M (first full quarter).
• EPS: Net loss $47.2M, or $0.94 loss per share, versus net loss $64.6M, or $1.34 loss per share in Q3 2024.

Guidance:

• Submitted sNDA for AXS-05 (Alzheimer’s agitation); awaiting FDA acceptance decision.
• Target NDA submission for AXS-12 (cataplexy in narcolepsy) in Q4 2025.
• Initiate AXS-05 phase 2/3 smoking cessation trial this quarter.
• Initiate pediatric phase 3 for sodium amphetol (ADHD) in Q4 2025; also expect phase 3 start for MDD with EDS this quarter.
• Expect top-line results next year from ENGAGE (binge eating) and SUSTAIN (shift work disorder).
• Plan to launch AXS-14 fibromyalgia phase 3 before year-end.

Business Commentary:

* Revenue Growth and Product Performance: - Axsome Therapeutics reported total revenue of $171 million for Q3 2025, representing a 63% increase year over year. - The growth was driven by strong performance across three marketed products: Auvelity, Sunosi, and Sembravo.

• Auvelity's Market Traction:
• Auvelity's net product sales reached $136.1 million, up 69% year over year.

• The growth in prescriptions, with approximately 209,000 written, reflects strong underlying demand and increased new writer activation, particularly in primary care settings.

• Sunosi's Steady Performance:

• Sunosi's net product revenues were $32.8 million, up 35% year over year.

• The product's durable performance and expanding adoption led to nearly double the year-to-date sequential growth compared to the same period last year.

• Commercialization and Sales Force Impact:

• The company's selling, general, and administrative expenses increased by 57% due to commercialization activities, including sales force expansion and direct-to-consumer advertising.
• This investment was aimed at supporting the broadened patient access and awareness for Auvelity and the launch of Sembravo.

Sentiment Analysis:

Overall Tone: Positive

• Management highlighted "strong revenue growth" ($171M, +63% YOY), Auvelity tracking "well against our long-term expectations," and stated "the fundamentals of our business have never been stronger," emphasizing continued commercial momentum and an advancing late-stage pipeline.

Q&A:

• Question from Leonid Timashev (RBC Capital Markets): Can you extrapolate Q3 Sembravo performance into Q4/2026, describe prescribing depth and potential bottlenecks before expanding launch investment?
  Response: Early Sembravo data are positive; Axsome is focused on penetrating targeted top headache centers first and will decide on additional launch investment as real-world uptake and access evolve.

• Question from Mark Goodman (Lyric Partners): Is primary care the key growth driver for Auvelity and how will you grow that segment—sales force expansion or other tactics?
  Response: Primary care (~1/3 of prescribers) is a major growth channel; growth driven by sales force expansion, improved market access, and DTC patient awareness.

• Question from Pete Stavropoulos (Cantor Fitzgerald): Given AXS-05's different clinical profile vs antipsychotics, what are adoption expectations and channel strategy if approved?
  Response: Expect broad multi‑specialty uptake (primary care, geriatric psych, neurology, long‑term care); will leverage existing MDD sales force and add dedicated long‑term care promotion if approved.

• Question from Sean Lehman (Morgan Stanley): How much capacity remains in the current sales force and when might you add reps again; how does that tie to cash‑flow positivity?
  Response: Current field force is driving strong growth; additional rep hires for Alzheimer’s agitation are planned early 2026 but a final number is undecided; cash flow positivity outlook already incorporates anticipated launch costs.

• Question from Ash Verma (UBS): How many days past submission are you and are you likely past the 60‑day priority review window; any impact from government shutdown?
  Response: Company did not disclose submission date; FDA notifies sponsors up to ~74 days on acceptance; no expected timing impact from shutdown; next update will be FDA acceptance decision.

• Question from Andrew Sai (Jefferies): For Sunosi studies in binge eating and shift work, describe study designs and what constitutes positive data to support SNDA filings.
  Response: Binge‑eating uses a standard parallel‑group design; one positive phase 3 would prompt a second study for filing; positive results would follow conventional regulatory endpoints for the indication.

• Question from Amy Fabio (Needham & Company): Strategically, will you add assets to drive operational efficiencies or focus on executing current late‑stage portfolio?
  Response: Primary plan is to execute existing late‑stage portfolio; company will selectively field inbound opportunities to complement the pipeline but is choosy given existing growth runway.

• Question from David M. Sellam (Piper Sandler): Thoughts on roboxetine commercial opportunity and competitive dynamics versus orexin‑2 agonists?
  Response: Roboxetine’s norepinephrine mechanism and favorable phase 3 profile should address unmet needs and complement existing treatment options; high commercial synergy with Sunosi infrastructure.

• Question from June Lee (Truist Securities): Where is Sunosi demand coming from (NT1/NT2/IH/OSA) and thoughts on combining Sunosi with AXS‑12?
  Response: Majority (~two‑thirds) of Sunosi prescribing comes from OSA; combination therapy may be used for some narcolepsy patients, but priority is first to secure AXS‑12 approval.

• Question from Ram Savaraju (HC Wainwright): After initial 150 headache centers for Sembravo, what next‑wave center targets and timing for DTC?
  Response: Next wave would expand beyond specialty headache centers into primary care; DTC timing is premature and will depend on prescriber coverage, market access, and sales‑force readiness.

• Question from Jason Gerbery (Bank of America): For AXS‑05, what clinical bar is needed for priority review/AdCom and what will long‑term care promotion entail?
  Response: Base case is standard review (priority possible but not assumed); long‑term care promotion requires a dedicated approach targeting nursing staff, pharmacy directors and medical directors distinct from outpatient promotion.

• Question from Yeton Sunaja (Guggenheim Partners): Do you expect an Advisory Committee (AdCom) for the AXS‑05 submission given prior AdComs in the space?
  Response: AdCom needs are determined during FDA review; company will await the agency's reception/acceptance decision to know if one will be convened.

• Question from Greg Savanavich (Mizuho Securities): What drove Auvelity's improvement in gross‑to‑net to high‑40%s in Q3 and will future contracting materially change GTN?
  Response: Improved access (additional ~28M lives added) and favorable formulary positioning drove GTN improvement; management expects to continue adding covered lives but timing and GTN impact from future contracts remain uncertain.

• Question from David Hong (Deutsche Bank): Any sense of minimum rep count required for an effective AXS‑05 launch and is that expansion in cash flow guidance?
  Response: Specific headcount is not yet finalized; plan assumes expansion for launch and those incremental costs are already included in cash flow projections.

• Question from Troy Langford (TD Cowen): When should we expect DTC to materially affect Auvelity scripts—inflection or gradual trend?
  Response: Expect to monitor weekly new patient starts; meaningful DTC impact could emerge in ~8–12 weeks but management views current trends as early encouraging signals.

• Question from Miles Vinter (William Blair): Will the third PBM/GPO contract materially move commercial covered lives/GTN and any change in FDA interactions?
  Response: Additional GPO improves coverage prospects but exact GTN impact timing is uncertain; FDA interactions remain status quo with ongoing routine dialogue.

• Question from Madison Alsotti (B. Riley Securities): Is growth driven by higher prescriptions per prescriber or more new writers; and will four phase‑3 trial starts this quarter be simultaneous?
  Response: Growth reflects both higher productivity from existing writers and activation of new prescribers; the four phase‑3 trials are on track to initiate in Q4 but will start in a natural cadence rather than all on one day.

• Question from Benjamin Brant (Wells Fargo): Any differences in regulatory interactions for the AXS‑05 sNDA versus prior programs, and what's driving expanded narcolepsy epidemiology estimates?
  Response: Regulatory interactions are in ordinary course with submission/acceptance process unchanged; increasing awareness and improved diagnosis likely drive larger epidemiology estimates—company plans using ~185,000 US narcolepsy patients for planning.

Contradiction Point 1

Sales Force Expansion and Market Access for Auvelity

It involves differing perspectives on the expansion of the sales force and market access improvements for Auvelity, which are crucial for the product's growth and commercial success.

What is the capacity of the current sales force, and when will additional reps be added? - Sean Lehman (Morgan Stanley)

2025Q3: Adamas' sales force expansion is almost complete, which we will leverage to begin promoting Auvelity for Alzheimer's agitation. - Ari Maizel(CEO)

How does Auvelity's DTC and sales force expansion impact its inflection? - Yatin Suneja (Guggenheim Securities)

2025Q2: The recent growth in Auvelity's prescriptions is from an increase in the productivity of the sales force, which is promoting and getting new patients to start on Auvelity. - Ari Maizel(COO)

Contradiction Point 2

Gross-to-Net Discount (GTN) Trends for Auvelity

It highlights differing statements regarding the trends in gross-to-net discount for Auvelity, which affects the company's revenue recognition and profitability.

What caused the improvement in Auvelity's gross-to-net discount, and are further improvements expected? - Greg Savanavich (Mizuho Securities)

2025Q3: Our gross-to-net discount for Auvelity has improved to well below 50%. - Nick Pizzie(CFO)

What drove Auvelity's net sales growth? - Ashwani Verma (UBS Investment Bank)

2025Q2: Our net price for Auvelity has improved. We still have some work to do. - Nick Pizzie(CFO)

Contradiction Point 3

Sales Force Expansion and Synergies

It involves the strategy and expected benefits of sales force expansion, which directly impacts the company's growth and commercial success.

What is the current sales force's capacity, and when might additional reps be added? - Sean Lehman(Morgan Stanley)

2025Q3: We are already expanding our sales force, so the foundation for that is there. We are going to expand the sales force if we get approval for Alzheimer's agitation. - Ari Maizel(CEO)

Could you provide details on the size or changes in Auvelity's sales force and whether this expansion will create synergies with the future prescriber base for Symbravo, and how? - Charles Duncan(Cantor Fitzgerald)

2024Q4: We added approximately 40 additional representatives to the Auvelity sales team, about a 10% to 15% increase in the overall sales force size. There is some overlap between migraine treaters in the primary care setting, which could result in synergies. - Nick Pizzie(CFO)

Contradiction Point 4

DTC Campaign and Timing

It involves the company's strategic approach to direct-to-consumer advertising, which can significantly impact brand awareness and patient demand.

What are the next steps for expanding beyond the initial 150 headache centers, and when will Sembravo's DTC campaign launch? - Ram Savaraju(HC Wainwright)

2025Q3: We are going to be launching DTC for Sembravo. We are going to have a DTC campaign for Sembravo when we feel HCP foundation is solid and when the sales force is of a size that can handle it. - Ari Maizel(CMO)

Regarding DTC promotional activities for Auvelity or Symbravo, can you comment on the cadence for initiating them and the strategies to optimize DTC buy efficiency? - Raghuram Selvaraju(H.C. Wainwright)

2024Q4: We intend to launch a broad-based media outreach plan for Auvelity this year, ensuring sufficient spend to drive awareness in the depression market. Calendar year seasonality considerations will be accounted for to target periods with high patient flow. For Symbravo, details on commercial go-to-market plans will be shared in the coming months. - Ari Maizel(Chief Commercial Officer)