Axsome Therapeutics Inc (AXSM) 2022 Q1 法說會逐字稿

Good morning, and welcome to the Axsome Therapeutics conference call. (Operator Instructions) As a reminder, today's conference call is being recorded.

I would now like to turn the conference over to your host, Mark Jacobson, Chief Operating Officer at Axsome Therapeutics.

This morning, we issued 2 press releases. Our earnings press release providing a corporate update and details of the company's financial results for the first quarter of 2022 and the release relating to the FDA's action on the AXS-07 NDA. These crossed the wire a short time ago and are available on our website at www.axsome.com. During today's call, we will be making certain forward-looking statements. These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of our investigational agents, our clinical and nonclinical plans, our plans to present or report additional data, the anticipated conduct in the source of future clinical trials, regulatory plans, future research and development plans, commercial plans, and possible intended use of cash and investments.

These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. We are cautioned not to place undue reliance on these forward-looking statements, which are only made as of today's date, and the company disclaims any obligation to update such statements.

Joining me on the call today are Dr. Herriot Tabuteau, Chief Executive Officer; Nick Pizzie, Chief Financial Officer; Lori Englebert, Executive Vice President of Commercial and Business Development; and Dr. Amanda Jones, Senior Vice President of Clinical Development. Herriot will first provide an overview of the company and then review recent developments and upcoming milestones. Following Herriot, Lori will provide a commercial update, and then Nick will review our financial results. We will then open the line for questions. Questions will be taken in the order they are received.

And with that, I will turn the call over to Herriot.

Good morning, everyone, and thank you all for joining Axsome Therapeutics' First Quarter 2022 Financial Results and Business Update Conference Call. The past few months have been incredibly busy and productive for Axsome. We have made progress in the FDA reviews of both of our NDAs, announced the agreement to acquire Sunosi and continue to advance the rest of our rich, late-stage pipeline, which includes the AXS-05 in Alzheimer's disease agitation, AXS-12 in narcolepsy, and AXS-14 in fibromyalgia. Axsome is poised to transform into a commercial entity potentially as early as this month, the direct results of our key focused execution. I will provide an update on the status of our NDAs, the pending Sunosi acquisition and the rest of our pipeline before turning it over to Lori and Nick, who will provide a commercial and financial update.

With regard to AXS-07, this morning, we announced that we have received a complete response letter, or CRL, from the FDA for the AXS-07 NDA for the acute treatment of migraine. Importantly, the CRL did not identify or raise any concerns about the clinical efficacy or safety in the NDA, and the FDA did not request any new clinical trials to support the approval of AXS-07. The principal reason given in the CRL relate to chemistry, manufacturing, and controls, or CMC considerations. The CRL identified the need for additional CMC data pertaining to the drug products and manufacturing process. We believe that all the issues raised in the CRL are addressable.

We are excited by the prospects for AXS-07. This excitement is driven by the strong clinical data and product profile of AXS-07. The approval of AXS-07 would offer a much needed new multi-mechanistic treatment option for the millions of people living with migraine. It is our goal to work closely with the FDA to provide them with the information they need so that we can make this important new medicine available to patients as quickly as possible. We intend to provide potential timing for resubmission following consultation with the FDA.

With regard to AXS-05, review of the NDA is progressing. Based on feedback from the FDA, we believe that the previously disclosed CMC deficiencies have been resolved. In addition, we recently received and agreed the post-marketing requirements and commitments proposed by the FDA for AXS-05. Based on this interaction, we anticipate potential FDA action on the NDA in the second quarter of 2022. With regard to our Alzheimer's disease agitation program, enrollment in the Phase III ACCORD trial of AXS-05 in this indication continues to progress. As previously disclosed, we are evaluating the design of the study and will provide an update following consultations with the FDA.

Moving on to the Sunosi acquisition, In March 2022, we entered into a definitive agreement to acquire Sunosi or solriamfetol from Jazz Pharmaceuticals. Sunosi is a dual-acting dopamine and norepinephrine-reuptake inhibitor indicated to improve wakefulness in adults with excessive daytime sleepiness due to narcolepsy or obstructive sleep apnea. The Hart-Scott-Rodino waiting period for the acquisition has now expired, and so we expect the transaction to close this month. Between pending FDA action on our NDA for AXS-05 in depression and the expected closing of our acquisition of Sunosi, Axsome is poised to potentially make 2 important new medicines available to patients living with serious CNS disorders in the coming months.

The rest of our late-stage pipeline continues to advance. For AXS-12, our product candidate being developed for the treatment of narcolepsy, enrollment in the SYMPHONY Phase III trial is progressing and top line results are anticipated in the first half of 2023. For AXS-14, our product candidate for the treatment of fibromyalgia, manufacturing and other activities related to the planned submission of an NDA are ongoing, and we expect to submit the NDA for this product candidate in 2023. I will now turn the call over to Lori, who will provide a commercial update.

The commercial team remains focused on preparations for potential commercial launches and simultaneously have been working hard to ensure a smooth transition of Sunosi into the Axsome infrastructure. I'm extremely proud of the efforts from the entire Axsome team and immediately upon deal close, we look forward to welcoming the Jazz employees to Axsome. Axsome is on the verge of becoming a commercial entity, and we are excited about the opportunity to bring potentially life-changing therapies to patients. The addressable diseases of focus for our near-term products are highly prevalent and have substantial unmet need. Our products, if approved, will bring a differentiated clinical profile to their respective markets.

As a reminder, Sunosi is the first and only FDA-approved dual-acting DNRI to treat excessive daytime sleepiness in adults with narcolepsy or OSA. EDS associated with narcolepsy or OSA is a serious condition that is associated with impaired neurocognitive function and can have effects on attention, memory, and executive functioning. Narcolepsy is an orphan condition that affects close to 200,000 people in the U.S., all of whom experienced EDS. OSA on the other hand, is a highly prevalent condition that affects an estimated $22 million U.S. adults an estimated 75% of OSA patients experienced EDS. Many of them continue to experience EDS despite the use of continuous positive airway pressure or CPAP.

Regarding AXS-05 and major depressive disorder, the mental health crisis impacting the U.S. continues with an estimated 21 million U.S. adults experiencing MDD each year, and recent studies estimate that number has likely increased threefold due to the COVID-19 pandemic. MDD is a common and serious medical illness that negatively affects how people fail, the way they think, and how they act. MDD is also the #1 cause of disability worldwide. Given the personal and economic burden associated with mental health conditions, there's an urgent need to bring support to those affected. If approved, AXS-05 would be an important new treatment option for the many Americans living with depression. We are prepared and ready to commercialize, if approved.

Shifting to AXS-07, despite recent innovation in acute migraine market, there continues to be close to 70% dissatisfaction rate with currently available therapies, demonstrating high unmet need for the 37 million Americans who experience migraine regardless of any delay on AXS-07 due to the CRL. We have been actively preparing for launch and will be ready to do so, if approved. Promotional efforts on Sunosi, combined with our near-term planned potential launch for AXS-05 in major depressive disorder allows for a highly complementary sales force effort. 40% of the current prescriber base for weight-promoting agents is made up of psychiatrists and neurologists, our primary targets for AXS-05 and AXS-07. As a reminder, all sales force offers are contingent upon approval.

Lastly, our first-in-class digital-centric commercialization or DCC platform remains fundamental to our commercialization strategy. Our DCC platform was designed to augment our promotional efforts to allow for highly effective, efficient, and more meaningful engagement with physicians and patients. The goal of DCC is to meet customers, where and how they want to be engaged, with the right content at the right time. Our commercial launch strategy is innovative and purposeful with the intent to bring important new products to market in a meaningful way. The differentiated clinical profiles of Sunosi, AXS-05, and AXS-07 have the potential to bring significant benefit to patients and the physicians to treat them. I look forward to discussing in greater detail the commercial plans for AXS-05 upon potential approval and for Sunosi after the close of the transaction.

We remain excited about the opportunity to potentially bring these important new products to market in the near term. I will now turn it over to Nick, who will review our financials.

Today, I will discuss our first quarter results and provide some financial guidance. We ended the quarter with approximately $85 million in cash compared to roughly $86 million at the end of the year, a net decrease of approximately $1 million. During the first quarter, we accessed our ATM facility, receiving net proceeds of approximately $31 million. R&D expenses were $12.6 million for the 3 months ended March 31, 2022, and $15.6 million for the comparable period in 2021. The decrease was driven by expenses related to the NDA filing, which occurred in the prior comparable period. G&A expenses were $25.7 million for the 3 months ended March 31, 2022, and $11.2 million for the comparable period in 2021. The increase was primarily related to pre-commercial activities and personnel expense along with an increase in noncash stock compensation expense. Net loss was $39.6 million or $1.03 per share for the 3 months ended March 31, 2022, compared to a net loss of $29.3 million or $0.78 per share for the comparable period in 2021. The net loss for the current period includes $7.6 million of noncash stock compensation expense compared to $3.7 million in the comparable period. Regarding the Sunosi acquisition, the acquisition is being funded through our existing $300 million facility with Hercules Capital, plus an additional equity investment from Hercules Capital.

We believe that our current cash balance, along with the remaining committed capital from the $300 million term loan facility is sufficient to fund anticipated operations into 2024 based on our current operating plan, which includes the potential launch of AXS-05 and MDD and the acquisition and commercialization of Sunosi. That concludes our first quarter 2022 financial review. I will now turn the call back to Mark to lead the Q&A discussion.

(Operator Instructions). Our first question is from Charles Duncan of Cantor Fitzgerald.

I have a couple of questions, primarily on AXS-07 and then on AXS-05. Regarding AXS-07 and the CRL, I know you haven't met with the agency, but can you provide us any additional color on not only this subject but of this CRL in terms of CMC, but what gives you confidence in your ability to address it? And how related is it, if at all, to the CRL or the CMC issues that you received with AXS-05?

I'll make some overarching comments and then I'll turn it over to Mark who maybe can provide some more details. With regard to the relationship, the question between AXS-05 and AXS-07, there is no relationship. The issues are distinct, and then also with regard to AXS-05, we did also announce that the CMC-related deficiencies have been addressed and resolved. Now with regard to the AXS-07 CRL, it's important to reiterate that the CRL could not identify or raise any concerns around the clinical efficacy or safety of the data in the NDA. So we feel very good about that and think that it's great to get affirmation from the FDA at the end of a review with regards to our clinical data. We love the product. We think it's an incredibly exciting profile and it's good to get to the end of a review.

Now with regard to the CMC questions and considerations. I'll turn over to Mark.

As we mentioned, the question and the request for additional information, they principally relate to drug product and the manufacturing process. So just a reminder that AXS-07 incorporates our MoSEIC technology, we have a novel technology that Axsome developed, and so that does increase the complexity of the manufacturing process, the MoSEIC technology, and so we understand the basis for many of the questions, and we do believe they're addressable.

And to give you just a little bit more detail, the technology is a molecular inclusion complex buffering system and many of the questions relate to that. And one other bit of information that may be helpful just to try and address the different elements of your question is our impression is the facility inspection that we had previously shared that we were informed we would require, that was completed, and that there were no findings as a result of that inspection.

So it sounds like really a distinct set of issues relative to AXS-05, but you feel like they're addressable and you'll provide us timing after you meet with the agency? Do you have a sense of when that could be?

That will be the approach we plan to take and how we share with folks. So we want to do that expediently. We do want to make sure we take our time to prepare for the consultations, and we will do that expediently, and as soon as we have a sense of granularity for timing, we'll let you all know. And then related to timing, we would expect this to be a Class II resubmission and I think as everyone is aware, that's a 6-month review.

And then one quick 2-part question on AXS-05, and that is great to hear that you've received some communication from the agency on post-marketing requirements. I'm sure that you can't provide a lot of detail on that, but I'm wondering if the post-marketing requirements for AXS-05, should it be approved, does that include a REMS and if so, can you provide any color? And then the second part is, given the kind of changing therapeutic landscape to incorporate perhaps more intermittent treatment, for example, with zuranolone out of Biogen-Sage, their filing. Do you anticipate there to be the same kind of demand or opportunity set that you had seen when you initiated the program with AXS-05?

With regards to the question around the REMS. REMS was not part of the PMRs or PMCs that were agreed to or discussed with the FDA. And just some overarching comments on your question around intermittent treatment, before I turn it over to Lori who might be able to provide some additional details there. But some overarching comments are that the way that major depressive disorder is treated has always been intermittent treatments.

So maybe the present episodes are treated, of course, and then many patients once they get better and they've been better for a while, clinicians would taper them off their medications. The important aspect of treatment is that not only should patients receive relief from their depressive symptoms, but that that should be maintained. So durability is really important, and we've shown significant durability with AXS-05 over long treatment periods, we treated patients out to 1 year. So we feel as good as ever on this if not better about the prospects for AXS-05 and MDD.

There's estimated up to 80 million prevalent MDD patients in the U.S. right now, and we all know we're in the middle of a mental health crisis. So any new therapies coming to market, we're excited about for patients and their ability to get treatment. What we know now with the current available therapies, 2-thirds do not achieve remission, and given the clinical profile of AXS-05 with a fast onset of action, the really fast achievement of remission and the durability as Herriot was mentioning, we do believe it is differentiated and compelling for physicians, and we don't see that this as hindering our demand at all.

Our next question is from Joon Lee of Truist Securities.

On AXS-05, have you started labeling discussions yet?

What we said is that as soon as we enter into labeling discussions, we will let the street now.

Great, and then can you remind us the conditions under which you can draw the [consumer funds] Hercules loan facility? Does it require approval?

Upon approval of AXS-05, there is $100 million that is tied to that approval. However, we do have an amendment that we had signed and becomes executed upon the Sunosi transaction, and that will accelerate the later tranches to fund up to $45 million of the Sunosi transaction. I think it's also important to note that Hercules has also committed $5 million to $8 million in a direct equity investment upon the close of the transaction.

The trial amendment that you're contemplating for the Alzheimer's agitation study for AXS-05, is that in any way related to sort of the discussion you're having with the FDA with regards to the depression indication?

No. It's not related to that.

Our next question is from Vikram Purohit of Morgan Stanley.

Two on the pipeline from our side. The first, staying on the topic of the ACCORD study, so you did mention previously that relapse events have been below your potential projections. I just wondered if you could give us an update on how those have been trending since you last provided us an update. And then also, do you have any sense of timing at this point on when you might be able to speak with the FDA about amendments to the study design that you might have in mind.

Sure. I'll let Amanda take that question.

Regarding the rate of relapses currently, so we have not disclosed any numbers, and we will disclose it when we provide top line data for this study. And in regards to the timing of discussion with the NDA, we haven't provided any granularity, but we do intend to do so as soon as possible.

Okay. And as a follow-up. For (inaudible) fibromyalgia, I know you've guided to an NDA submission in 2023. What needs to happen between now and then? For that NDA submission and do you know specifically when in 2023 that might be expected? Is it more of a first half event or a second half event?

We haven't given granularity on the timing yet for 2023. As we get closer, we'll narrow that guidance for you all. Right now, the rate-limiting step continues to be the manufacturing and stability. We do have to recapitulate and are manufacturing from the prior process, and that work is ongoing.

Our next question is from Marc Goodman of SVB Leerink.

Herriot, I think I heard you say that you have affirmation with respect to AXS-07 that there is nothing else related to efficacy or safety. Can you make that same comment when it comes to AXS-05?

It's impossible for us to make any comment like that with regard to AXS-05 prior to an NDA action. So we're able to make comments with regards to AXS-07 because now the review is officially completed, and the FDA has formally provided us with the determination that the NDA is completed and what the outstanding issues are. So with regard to AXS-05, while we are very positive on the efficacy profile and on our package, and while we are encouraged by the latest developments in the review process with the PMRs and the PMCs, as you can understand, it's not over until we get the FDA action, and we're very much looking forward to the FDA action hopefully soon.

And just on AXS-05, there seems to be just a concern out there that there could be a problem with how this thing gets labeled. I assume it's because of the dextromethorphan component. You mentioned specifically that there will be no REMS, so that's great news. Are there any other issues that seem to be out there with the FDA regarding dextromethorphan? Or you don't think that's going to end up being a labeling issue at all?

Well, all we can speak to is our product. And just as a reminder, the technology with AXS-05 is we're using metabolic inhibition to inhibit the metabolism of dextromethorphan. So therefore, the pharmacology is going to be different, which is why the FDA did require us to conduct a very large open-label safety extension study and also to have exposure in thousands of patients. So we've done that, which is fantastic. We're confident in the data. We released those data and we're looking forward to the conclusion of the review and the NDA action.

And then lastly, just on the big picture on manufacturing. Obviously, it seems to be a discussion here just about every product. Can you just remind us, are you using the same manufacturing companies with respect to all of these products of AXS-07, AXS-05, and AXS-14? I mean are we going to have the same kind of issues or what next?

There is some natural overlap, as you can imagine, amongst vendors. However, we do not think that the issues related to one NDA versus the other are related at all in any way. The other thing that I would mention, too, is while this is disappointing obviously to get to the end of a review, and have a CRL, there does seem to be just more globally, if you look at the industry, an increase in the percentage of NDAs that receive CRLs, especially for manufacturing that may be an indication of the climate at the FDA. But for example, the rate of CRLs has been roughly 50% at least in the first half of so far this year compared to around 15% historically, and most of those are related to CMC. So we fully understand the reason why the agency would want to make sure that any new technology, any new manufacturing process is fully vetted.

Well, you're working on manufacturing right now for AXS-14, so it just kind of lends the question of are you learning some things from the issues before? Is this the same manufacturing people who will learn from what the FDA needs with these other products, that's really the question.

Each program, we have selected CMOs that we think are best suited to commercialize the product candidates, and so AXS-14, that's an entirely different…that has its own facility, its own companies, API and drug product. With AXS-07, there are multiple facilities involved there. As we mentioned, one of them had a required inspection and our understanding is there were no findings, so this question about is there an underlying issue with the CMO? We're not aware that that's the case, and there is some overlap with the programs, but generally each is distinct. And another way of answering your question, Marc, is yes, there are learnings from every interaction with the FDA from every NDA. And by the time that we file the NDA for fibromyalgia, we would have gone through at least 2 or maybe 3 NDA filings, and we will take every lesson that is possible. We'll mine those experiences to make sure that we increase our probabilities of success in the future.

Our next question is from Vamil Divan of Mizuho Securities.

So maybe just a couple of separate questions. So one on AXS-05, I think we still get a lot of questions from investors on the payer dynamics here, since there are 2 older products, obviously they're still waiting for approval here, but I'm wondering if you can give any sort of updated thoughts on kind of how you think payers will respond to this product and what the hurdles are that patients have to go through before they can get onto the product. And on Sunosi, just had a question there on…I know you're probably somewhat limited what you can say before the deal officially closes, but your expectations for sort of $1 billion product here, quite a bit above what The Street has generally thought of this product. I assume it's because there are newer indications that you're looking to move this product into. I'm just wondering if there's any more you could share at this point in terms of how you're hoping to expand this product out into other indications beyond what it's already approved for?

I'll take the Sunosi question before turning it over to Lori to take the payer dynamics question on AXS-05. We're really excited about the Sunosi acquisition. We did put out an 8-K this morning announcing the HSR waiting period has now expired. So we do expect the transaction to close very shortly, and we do anticipate having some kind of investor forum to discuss what the new indications are and the timing of making sure that we take the steps that we need to take to get to that $1 billion plus market potential, which we outlined when we first announced the signing of the acquisition. So we're really excited about Sunosi. And I'll turn it over to Lori to talk about the payer dynamics and to add anything more that she may want to add about Sunosi.

So we started payer permitted payer discussions back on AXS-05 about a year ago and nothing's changed. Payers continue to recognize the unmet need in MDD, and they continually express their understanding of the fact that AXS-05 will bring a novel mechanism of action to the market. They recognize that there's a need for fast and rapid onset of action and also durability for those patients. And we look forward to telling you more once the potential approval comes, and we engage them all. In terms of Sunosi, we are excited about the current indication as well. We do believe that there is incredible untapped potential in the current indication for ADS, especially with narcolepsy or OSA. We're also really excited about how the Jazz team that will come over to Axsome have been working during this transition period.

Last week, in fact, NBRx is so new to brand. Prescriptions were the second highest of the year, and that came during the time of transition. So we are really excited about the caliber of Jazz employees on board Axsome and look forward to welcoming them upon the deal placement.

Our next question is from Joseph Thorne of Cowen and Company.

Maybe just on the AXS-05 review, it's been a couple of weeks now almost, I think, since you announced that you agreed to the post-marketing commitments. In the interim, do you continue to interact with the FDA? What's sort of a cadence of interactions around this? During that discussion, were you able to kind of find out maybe what the initial deficiencies noted in the July letter last year happened to be?

As you can imagine, during this phase of the NDA review, there are multiple interactions, so those continue. And with regards to the initial efficiencies, all we are aware of are what the deficiencies are that have been communicated to us, and those deficiencies [were CMC]. And as we've stated, we have addressed those deficiencies, and they are now resolved, and we're not been made aware of any other deficiencies.

Maybe just one follow-up. How are you thinking about Europe? And obviously, we'll get to note here, hopefully in the third quarter. Is that something that you want to launch yourself, when you think about AXS-05 and AXS-07, how far do you want to take those in discussions with Europe before making a decision on marketing? How are you thinking about that overall?

The way that Sunosi factors into our European strategy is now it gives us an additional product in Europe, a product which is approved and marketed currently in Europe and which has also a rollout in multiple new European markets on the roster. So as it relates to our overall corporate strategy prior to the Sunosi acquisition announcement, which was to out-license our product candidates outside of the U.S. This only puts us in a much stronger position, and as you can imagine that might lead to greater interest from potential partners.

Our next question is from Ram Selvaraju from H.C. Wainwright.

Firstly, I just wanted a clarification regarding the time line for potential approval of AXS-07. Since you mentioned that this is likely to be considered a Class II resubmission, is it appropriate for us to assume at this juncture that the earliest AXS-07 could be approved in the U.S. would be in 2023?

What we're looking to do is to meet with the FDA as expeditiously as possible. That's a Type A meeting. We want to make sure that we get our ducks in a row prior to requesting that meeting and getting a date. Once we have that meeting and we get feedback from the agency, in other words, we confirm exactly what it is that could go into the resubmission so that you can have success, then we'll be in a position to provide you with updated guidance on timing. Apart from what we've already said, which is that we do expect that once we resubmit that the resubmission would likely be treated as a Class II resubmission leading to a 6-month review.

Great, and then just 2 very quick additional ones for me. Can you comment on how you anticipate deploying the Sunosi salesforce that is coming over in the Jazz acquisition transaction? And if you anticipate a meaningful role for those sales representatives in the ultimate promotion of drugs like AXS-05 and AXS-07, and then also if you could comment on any plans that you may have with respect to deployment of either Sunosi or AXS-12 in the area, specifically of idiopathic hypersomnia?

So taking those backwards, with regard to the additional indications that you mentioned, we are always thinking about additional indications with regard to the specificity, we don't have any specifics to share with you right now. And I'll turn it to Lori to comment on the last question.

So I think it's very important for sales forces, especially during launch periods, and in this case, [the person I see] eventually dealing this as somewhat of a relaunch coming over to us. They need to stay focused on their priority targets, and so they will be deployed to high-prescribing, high-potential, high-value prescribers in the respective markets. The AXS-05 sales force, we'll primarily focus on those targets related to AXS-05 where we believe we will have the highest potential and the same for the Sunosi. However, we do know that there is a very high overlap between prescribers and as appropriate, we will leverage those synergies.

Our next question is from Jason Gerberry from Bank of America.

One clarification, just in terms of REMS, is that something that you learn about via label discussion? Or is it more something that you learn about what the post-market requirements? And then there's been some recent neuropsych launches that have exceeded investor expectations. So just curious if you think there's read across [you learn] effectively, is there any structural challenges at all in contracting cycles?

Just with regard to the question on the REMS, this is one of the first NDA, actually these are our first 2 NDAs that we are going through. A REMS is not anything that we're thinking would be needed with regard to these product candidates. You never know, though. And until the review is over, we can't really assure you of the FDA's findings or gestations or more requirements. But we can medicate to you are the PMRs and the PMCs, which we have agreed to and which have been communicated to us, and they have not included us the REMS.

Your second question kind of faded in and out. Would you mind repeating that question?

Yes.

(technical difficulty)

expectation, so curious if you think there's read across the AXS-05 from what you're seeing, it seems that maybe payer coverages coming online a little faster than expected. I mean, you guys will have effectively a midyear launch. I don't know if that will be like a 2022 challenge in terms of where you're in the contracting cycle or a nonissue?

Great question, thank you. All we have are the committed payer discussions that we've had thus far and that we are highly encouraged by how the payers are reacting to the product profile of AXS-05. So once we get approval and we know the timing of that approval, we'll be happy to discuss more around what we expect from a payer coverage standpoint then.

And if I may add to that Lori, just the part of Jason's question related to the broader environment as it relates to recent neuropsych launches, which have exceeded expectations, and is there something broader going on. It's hard to know if the performance of individual product launches, even though they coincide in time, reflect anything that's underlying. There is one underlying trend, which is worth repeating, which is that we are in the middle of a mental health crisis, so there has been a significant increase in neuropsych disorders. We think or our scientists think that it's related to the COVID pandemic.

So that is one backdrop that has been occurring. We know that that's the case, for example, in depression, certainly, but not just in depression, but even across, for example, migraine, the incidence of migraine has gone up in patients who have experienced COVID-19. So there is that aspect to it, and I think what it speaks to more broadly is the high unmet medical need in neuropsychiatry indications in general. That's why Axsome is a CNS-focused company, and that's why we're really excited about what we're doing.

Our next question is from Yatin Suneja from Guggenheim.

A few clarification questions from me. The first is on AXS-05. What are your expectations for labeling? Do you expect the box volume similar to what we see with Wellbutrin or other antidepressant?

Since, bupropion is a component of AXS-05, we would expect that aspects of the bupropion label would be reflected in the AXS-05 label.

Okay. This is again related to AXS-05, so when you say that the CMC issues have been resolved, did you get an acknowledgment from the FDA that they are satisfied with your response? Or it has been resolved just that you have submitted the response? I'm just trying to get a little bit clarity here. What does the resolution mean here?

It's pretty clear to us that it's been resolved based on the communications and also the PMRs and the PMCs.

Okay. And then finally, how quickly you might be able to launch once approved for AXS-05?

We expect to launch within a quarter of approval.

Any comment on the pricing? How should we think about pricing? What work you've done? Any sort of recent comp for us to look at in terms of the price?

Yes, we haven't communicated price yet, and we will do that upon approval, when we announce the price. We expect to recognize the clinical differentiation of the product, but we also have an eye towards providing patients with the approach of appropriate access.

Our next question is from Chris Howerton of Jefferies.

Great. I really appreciate you taking all the questions this morning and all the extra info. So I think for me, I was just curious if you could provide any comments or color on how the AXS-05 approval and launch plays into your current stated cash runway? And as sequelae to that, if there was a delay or non-approval for AXS-05, how might that affect your cash runway guidance.

So again, upon AXS-05 approval, there is $100 million tied to that approval with our Hercules facility. So we feel that we are in a very good position to launch the product, and we are planning that for this quarter. We do have sufficient cash for over a 12-month period, and as I stated in the opening remarks, we did tap our ATM facility in Q1 for upwards of $31 million to bridge the delay in the approval of AXS-06.

Okay. And maybe just as a quick clarification, if there was a further delay to AXS-05, how might that affect your current cash runway guidance.

So if there's a further delay, we'll reassess it at that time. But as I said earlier, we do have north of 12 months of cash on hand to fund our current operating plan.

Our next question is from Matt Kaplan of Ladenburg Thalmann.

Just wanted to have a little more detail perhaps on the AXS-07 CRL. Beyond CMC questions, was there anything else detailed in the CRL that needs to be addressed?

Principally, with all CMCs, there was one item related to nonclinical, which was just a request for additional information, which we believe we can provide. So for us, this is a standard focus of CMC.

A question for Lori. Can you give us some more metrics in terms of how you're thinking about the sales organization as you go into launch several products here, in terms of some of the metrics around the size of the Sunosi and dedicated for AXS-05 and AXS-07 dedicated sales forces, how they interact.

A couple of things to keep in mind as you think through how we plan to structure. We haven't revealed the size of the sales forces yet, but what I can tell you is that for AXS-05, we plan to target at least 85% of high-value prescribers, which is more than 25,000 HCPs. We will not only have a sales force in place, but we will also intend to leverage our DCC platform to help ensure that we have optimal reach to those high-value prescribers. For AXS-07, it will be a very similar approach in terms of how we structure the sales force, highly targeted, highly strategic, and highly focused. We plan to have coverage of 50% to 60% of the high-value prescribers with AXS-07. And then on Sunosi, virtually all the offers that we extended to the Jazz employees were accepted in that sales force size. We look forward to talking to you more about on the deal close, but it will be exactly the same kind of structure and decision-making, highly focused on those high-value prescribers to make sure that we get our reach, we will augment with DCC.

Our next question is from Robert Hazlett of BTIG.

A quick follow-up to Matt, and what is the additional ask for information regarding CRL for AXS-07, is that related to the MoSEIC technology or can you be any more specific with regard to the additional ask...

I think we characterize it, I mean much of it does relate to MoSEIC and the process around that and drug product.

Okay. Then just shifting to ACCORD for just a second. What are the goals of the interaction with the agent? What can you do with the study? Is it an issue where you might change the design and study by changing the powering? What are the goals of the discussions with FDA with regard to evaluating the study design?

The reason why it's prudent to have as much feedback as possible is this is a registration trial, and so we want to make sure that we take the right steps and avail ourselves of the fact that this is a breakthrough therapy dedicated product to get that feedback.

Just one other for me. Smoking cessation, you talked about a pivotal in Phase II/III later this year. Do you think you can get away with one or is that something you're going to do sequentially with regard to 2 pivotals for smoking cessation for AXS-05?

We expect that we would need 2 pivotal studies. And currently, the plan would be to do those sequentially.

The next question is from Myles Minter of William Blair.

Just on the AXS-05 timing guidance that you put out when the PMRs and the PMCs were agreed upon and you said this quarter. I'm gathering that was based on precedent of some sort, but was that directly communicated to you by the agency, their timing? Or is that from your regulatory consultants from work that you've done? Obviously, the street is seeing labeling discussions triggering that 1-month clock, but just wondering how you've got that clarity from the PMR and PMC stage.

So Myles, thank you for that question. Just to be clear, there is no new PDUFA date. So the FDA has not beholden to any particular date. What we've tried to do is to provide the street with actionable information, so if any change in terms of our internal estimates as quickly as possible. So what drove our statement are the PMRs and the PMCs. So with regard to those discussions, sometimes there are timing elements tied to those, and so that has allowed us to focus our estimate. But again, this is our estimate, and it's not tied to a formal PDUFA date.

And then just on the PMRs and PMCs, obviously, not disclosing the nature of them, but if we were to look at the guideline, the FDA guidance documents for antidepressant chart development, are they 100% encapsulated in the language in there, so like maintenance dosing studies that might be required post-marketing or safety in certain populations? Or are there certain PMRs and PMCs within those that would be next to the product that might not be talked about in those guidance documents.

Yes. So as you can imagine, the PMRs and the PMCs would necessarily incorporate both items that are not only required for an indication, which might be included in guidance as well as items that are specific to the individual product. What we can say is that the PMRs and PMCs that were discussed that have agreed to and they're consistent with our expectations, and there was nothing surprising. We're happy with them. We do not expect them to, in any way, impede commercialization of AXS-05 for MDD.

Our next questioner is David Hoang from SMBC.

Just had one on commercialization and the sales force. In terms of your digital component there, what's your level of confidence that that's going to be able to supplement the sales force at the current size that you plan to bring on board? And is this something that you would have a high level of confidence in, or would you consider potentially expanding the number of reps down the line?

Our DCC platform, the way that we designed it, was really to ensure that engagement with HCPs and patients are optimized, meaning, we have the ability to have efficient promotional efforts, but also affect the commercial efforts. So what I can tell you is that we're not going to sacrifice to not have those effective promotional efforts. So we believe, based on not only research, physician preference data, historical data of how physicians are engaging, how physicians continue to engage, how patients are showing up at physicians' offices or not, meaning the level of virtual engagement in our target therapeutic areas still remains extremely high. So we feel very confident in the amination that DCC will provide our sales force.

Our final question is from Esther Hong of Berenberg.

On AXS-07 and the CMC issues, I was wondering, number one, did the FDA find this issue? And then number 2, did this occur after the facility inspection.

I don't know that it's a finding from the inspection as we mentioned that there were no findings that we're aware of. And our sense is this is the result of their review during the course of the review cycle, and so that's our impression. But they didn't give us feedback when they identified these needs for additional information.

That ends our question-and-answer session. So I would now like to pass the conference back to the management team for any closing remarks.

Well, thank you again for joining us on the call today. We are committed to bringing potentially life-changing medicines to people living with serious CNS conditions. We look forward to updating you over the coming months on our continued pipeline and commercial progress.