Axsome Therapeutics, Inc. (NASDAQ:AXSM) Q4 2022 Earnings Call Transcript

For Auvelity, we have roughly 2.5 weeks of future demand in the channel. I think obviously, the growth brand, we just launched it, and we do expect interim levels to fluctuate at our distributors as Auvelity builds additional momentum in the market. It’s not unexpected, and we believe we are in patterns we really reflect the strong patient demand that we’ve seen. For Sunosi, we did have increased wholesale buying during — due to the seasonality at the end of Q4. The inventory levels were somewhat elevated. However, we do see in Q1 that these inventory levels are coming down to approximately 2 to 2.5 weeks. And one note is that we are — actually in Q1, we — operationally, for distribution, we changed our model from a title model to the traditional 3PL model.

Title model was as it relates to — as we launch and ensuring that we get licenses in every state. We changed to a traditional 3PL model now and reduce the — essentially the trick that the middle man distributor, so we will see an inventory reduction in the channel which will impact Q1 sales for Sunosi by roughly two weeks.

Jason Gerberry: Okay. Thank you.

Operator: Our next question is from the line of David Amsellem with Piper Sandler. Please proceed with your questions.

David Amsellem: Thanks. So just had a couple. First, on Sunosi, just broadly, what do you think you can do differently from the predecessor company that control the asset in terms of driving an inflection in volumes? And is the focus going to be more on OSA versus narcolepsy? And just give us a sense of what you’re prioritizing and how you believe the commercial landscape for Sunosi might prove to be different over time to the extent it is at all? So that’s number one. And then number two, on Auvelity, how should we think about eventual expansion of the sales organization to the extent you need to and just talk about how that’s going to evolve over time as the product gets more into its commercial life? Thank you.

Lori Englebert: Yeah. Hi, David, I’ll take both of those. So first of all, I’ll start with Sunosi, and how do we think we’ll have an inflection point with this relaunch that we’ve talked about of Sunosi? Jazz had a really strong foundation for the launch for the initial launch. The important thing to remember about the initial launch was Jazz, one that they launched about three months prior to the COVID shutdowns. And so the initial launch was heavily impacted for the majority of the first 18 months of the launch for that product. What we believe we are doing right now that will help provide an inflection point is that we have gotten really hyper focused on the highest potential prescribers. And our plan is to make sure that with our differentiated clinical profile that those five prescribers that we penetrate those five prescribers and then start to expand out in terms of targets.

Doing that will help us gain market share very quickly as we really get s sophisticated on the approach. In terms of OSA versus Auvelity. OSA has a prevalence of about 22 million patients and narcolepsy is 200,000. So that start difference right there tells you that a much larger opportunity is in OSA. We will, right now, continue to focus on OSA, but we’re not letting our foot off the gas on narcolepsy. So as there’s still a lot of room for growth there as well. In terms of Auvelity in the expanded sales organization, right now, we have about 165 reps coming on 25,000 HCPs. We are very, very confident in our — using our DCC approach to make sure that our reps are able to have the tools that they need to make effective calls and be very efficient about doing it.

And because of that, we are very focused on making sure the penetration in those original target list, which are the highest potential prescribers in the MDD space is really high before we comment any further on any additional plans.

David Amsellem: Okay. Helpful. Thank you.

Operator: Our next question is from the line of Joon Lee with Truist Securities. Please proceed with your questions.