GUGGENHEIM 3RD ANNUAL HEALTHCARE INNOVATION CONFERENCE - AXSOME THERAPEUTICS INC

Explicit Guidance:

• FY2026 & FY2027 Net Gross-to-Net (GTN): Guidance indicates GTN for 2027 will likely mirror the quarterly trajectory of 2026 as a starting point, with potential fluctuations driven by the growth of the Medicare patient mix (MIX) and improvements in coverage quality (moving toward preferred, unrestricted status with no Prior Authorization).
• Quarterly Revenue: No specific numeric revenue guidance provided; qualitative outlook projects "continued robust growth" for FY2026 and FY2027, driven by underlying MDD momentum and accelerated growth in the Alzheimer's Disease (AD/ADA) indication.
• Sales Team Investment: No specific capex/opex guidance provided, but management confirms a "transient investment" in sales force expansion (doubling from ~270 to ~650 reps) completed in Q2, expected to yield ROI within 4–6 months.

Business-Segment Outlook:

• Avelity (MDD & AD Agitation):
  • New Indication (AD Agitation): NBRx (new prescriptions) grew 3.6x in the first month post-approval (from 1,000/month pre-approval to 3,600/month by end-Sept 2025); TRx (refills) are expected to "catch up" and accumulate over the subsequent couple of quarters, acting as a funnel for sustained growth.
  • Long-Term Care (LTC): Team is active in LTC; growth in this channel is expected to accelerate through end of 2025 and into 2026, driven by facility activation and prescribing system integration.
  • Primary Care: Current penetration ~25%; management expects "a lot more" growth in primary care settings, with ramp-up timed to match payer access levels.
  • Backlog/Funnel: Weekly NBRx reached 3,800 in October (up from 2,400 in Q1), indicating future TRX growth not yet fully reflected in current revenue.
• Senose (EDS):
  • Growth: Low-to-mid single-digit sequential growth in current approved indications; operating with a fixed sales team (~70 reps) and stable marketing spend.
  • Peak Sales: Targeting $300M–$500M peak sales for current indications; currently "tracking very nicely" toward this range.
• Sembravo (Migraine):
  • Growth: Expected to continue growing from a volume base of $3.9M/quarter (Q3); management expects continued future growth driven by strong clinician/patient feedback.
• Pipeline Milestones (2026–2027):
  • AXS-12 (Rupoxetine for Cataplexy/Narcolepsy): PDUFA date set for May 1, 2026; currently mid-review. Pre-launch activities underway; expected to be accretive to P&L quickly with minimal additional marketing investment (leveraging existing sleep infrastructure).
  • Binge Eating Disorder (BED): Topline data expected Q1 2026 (study enrollment complete); success requires statistically significant primary endpoint. FDA requires two adequate and well-controlled trials for standalone efficacy package; second trial to follow if first is positive.
  • Synosy (ADHD): Positive adult trial completed; pediatric/adolescent trials ongoing. Success in these studies required for marketing application filing.
  • Synosy (Shift Work Disorder): One clinical study needed (FDA considers this a related indication); positive result allows for NDA filing.
  • Synosy (MDD with EDS): Randomized withdrawal trial (Clarity); enrollment completion expected next year; top-line readout timing TBD, event-driven.
  • Pediatric Indication: Roadmap extends to 2038/2039 for pediatric launches.

Market and Competitive Outlook:

• Competitive Landscape (Cataplexy): Acknowledges focus on the orexin inhibitor class; positions AXS-12 as mechanistically distinct with a unique efficacy and tolerability profile to capture discreet patient profiles.
• Pricing/Reimbursement: 89% total covered lives for MDD (100% for Medicare); majority have no Prior Authorization (PA) or step therapy. Strategy focuses on improving coverage quality to "preferred, unrestricted" status, which may pressure GTN but increase volume.
• Market Dynamics: Management notes that while historical NBRx-to-TRx conversion rates exist, the current launch strategy (simultaneous field force expansion) is intentional to build a "robust durable and sustained growth" trajectory, even if it causes initial disruption.

Macro / Industry Outlook:

• Rates/Tax: No specific commentary on interest rates or tax rates.
• Regulation: FDA review for AXS-12 progressing "as expected"; FDA requires two trials for BED and one study for Shift Work Disorder based on distinctness vs. current approval.
• Supply Chain: No specific constraints mentioned; management notes "activation of facilities" as the primary logistical hurdle in LTC, not drug supply.

Strategic Initiatives:

• Sales Force Expansion: Completed doubling of sales force (~270 to ~650 reps) and doubling of first-line leaders in ~6 months (mostly Q2); intended to capitalize on new indication and payer access.
• LTC Channel Entry: Dedicated sales group activated for Long-Term Care facilities; strategy involves "facility activation" (nursing director education, prescribing system placement) rather than standard rep detailing.
• Cash Flow Management: Achieved Q3 cash flow positivity ($5M–$6M profit after stock-based comp); future decisions on capital allocation will prioritize "sustained cash flow positivity" and top-line growth investments.

Risks and Headwinds to Outlook:

• Clinical/Regulatory: FDA requirement for two positive trials for BED indication (single success does not guarantee approval); placebo response rates in MDD and Psychiatry are "increasing materially," potentially challenging clinical trial success rates for Synosy.
• Reimbursement/Commercial: Future Net-to-Gross (GTN) pressure if coverage quality does not improve or if Medicare mix shifts unfavorably; Q4 GTN may tick up due to accruals for prescriptions adjudicated in Q1.
• Operational/Integration: Sales force expansion creates inherent "disruption" and requires optimization of a new team (avg rep tenure 4–6 months); LTC channel has a longer sales cycle to prescribing compared to office-based practices.
• Competitive: Emergence of new orexin inhibitors may impact the cataplexy/narcolepsy market landscape for AXS-12.

Management Tone on the Future:

• Confidence Level: Highly optimistic and confident; described as "an amazing time for the business" and "things have never been better."
• Guidance Changes: Shifted from negative cash flow to cash flow positive; accelerated revenue growth (Avelity revenue up 53% YoY, accelerated from 51% in Q2).
• Strategic Clarity: Clear intent to invest aggressively now to secure long-term dominance, citing a "very long runway" to 2039.
• Hedges: Qualitative guidance rather than numeric; notes that TRX lag is a known variable and that future GTN depends on payer negotiations.

Miscellaneous:

• Financial Milestone: Q3 revenue $260M; Avelity revenue $208M (53% YoY growth); Senose revenue ~$46M; Sembravo revenue $3.9M.
• Balance Sheet: $314M in cash; net loss $13M (excluding $28M SBC and one-time items, net positive cash flow).
• NBRx Metrics: Weekly NBRx growth: Q1 (2,400) → Q2 (3,000) → Q3 (3,550) → Oct (3,800). AD Agitation NBRx: 1,000/month pre-approval to 3,600/month post-approval.
• Product Portfolio: 3 commercial products (Avelity, Senose, Sembravo), 10 pipeline programs (mostly NDA/Phase 3); 4 indications currently approved.