Axsome Therapeutics, Inc. (NASDAQ:AXSM) Q3 2025 Earnings Call Transcript

Axsome Therapeutics, Inc. (NASDAQ:AXSM) Q3 2025 Earnings Call Transcript November 3, 2025

Axsome Therapeutics, Inc. misses on earnings expectations. Reported EPS is $-0.94 EPS, expectations were $-0.82.

Operator: Good morning, and welcome to the Axsome Therapeutics Third Quarter 2025 Earnings Conference Call. My name is Daryl, and I will be your operator for today’s call. [Operator Instructions] Please note that this call is being recorded. I would now like to hand the call over to Darren Opland, Senior Director of Corporate Communications. Please go ahead.

Darren Opland: Thank you, Daryl. Good morning, everyone. Thank you for joining us for Axsome’s Third Quarter 2025 Earnings Conference Call. With us today are Dr. Herriot Tabuteau, our Chief Executive Officer; Nick Pizzie, our Chief Financial Officer; and Ari Maizel, our 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. This morning, we issued our press release providing a business update and detailed financial results for the quarter. I encourage everyone to visit the Investors section of our website to find the press release and accompanying presentation to 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 SEC 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 now I’ll turn the call over to Herriot.

Herriot Tabuteau: Thank you, Darren, and good morning, everyone. Axsome continues to lead in CNS innovation, driven by disciplined execution and a clear focus on sustained growth and value creation. In the third quarter, we delivered strong revenue growth with total revenue of $171 million across our 3 marketed products, representing a 63% increase year-over-year. AUVELITY continues to gain traction as a differentiated treatment for major depressive disorder, driven by strong underlying demand. We’re pleased with the pace of AUVELITY’s performance, which is tracking well against our long-term expectations and underscores the significant opportunity for continued growth ahead. SUNOSI remains on a steady trajectory with year-to-date sequential growth nearly double that of the same period last year, a testament to the product’s durable performance and expanding adoption.

SYMBRAVO completed its first full quarter of commercial launch in Q3. Our focus now is to continue strengthening the foundation for long-term success by broadening patient access and driving awareness with clinicians. Nick and Ari will speak in more detail about our financial and commercial performance and the strategic execution driving momentum across Axsome’s portfolio. Beyond our continued commercial growth, Axsome’s R&D engine is advancing a robust pipeline of late-stage programs with the potential to deliver transformative therapies for patients and significant value to our shareholders. Over the coming months, we expect meaningful activity across our late-stage programs, including 2 NDA stage programs and multiple registrational trials underway or initiating.

Q&A Session

I’d like to start with our top priority areas in psychiatry and neurology, Alzheimer’s disease agitation, narcolepsy and ADHD. These are areas where we see substantial opportunity to transform patient outcomes, leverage our commercial infrastructure and unlock significant value. First, we are pleased to share that we have submitted our supplemental NDA for AXS-05 in Alzheimer’s disease agitation. And we look forward to announcing the FDA’s decision on acceptance of the filing. This submission is an important milestone for AXS-05 and for the millions of patients and caregivers affected by the serious and underserved condition. The addressable market for Alzheimer’s disease agitation is substantial, and the unmet need is high with currently only one product approved.

AXS-05 represents a first-in-class mechanism of action that has the potential to set a new standard in the treatment of AD agitation. Work is already underway to efficiently scale our commercial platform to deliver an impactful launch if approved. As a reminder, we are also developing AXS-05 in smoking cessation, and we are on track to initiate a Phase II/III trial in this indication this quarter. Our next pipeline priority area is narcolepsy. We continue to target the submission of our NDA for AXS-12 for the treatment of cataplexy in narcolepsy in the fourth quarter of this year. AXS-12 represents a highly differentiated opportunity to address critical gaps in current treatment. Up to 70% of patients suffer from cataplexy and many continue to experience inadequate relief or poor tolerability to existing treatment options.

We are excited about AXS-12’s potential to make a meaningful difference for patients living with narcolepsy. We also like its strategic fit with our existing sleep franchise, which we anticipate will enable highly efficient and synergistic launch, if approved. For ADHD, solriamfetol has demonstrated positive results in adults in the FOCUS Phase III trial completed earlier this year. The next step is a Phase III trial in children and adolescents, which we plan to initiate in the fourth quarter of this year. If successful, this indication could substantially expand the opportunity for solriamfetol beyond its currently approved indications. As a reminder, we are also developing solriamfetol in 3 additional indications, MDD with excessive daytime sleepiness, binge eating disorder and shift work disorder.

For MDD, we anticipate the initiation of a Phase III trial in adults with MDD with excessive daytime sleepiness this quarter. Next year, we expect top line results from the ongoing ENGAGE Phase III trial in binge eating disorder and the SUSTAIN Phase III trial in shift work disorder, and we look forward to providing progress updates in the near future. Turning to AXS-14, we are finalizing preparations for our planned Phase III trial in fibromyalgia, which we expect to launch before year-end. These milestones highlight the continued expansion of Axsome’s leading neuroscience pipeline, spanning multiple psychiatry and neurology indications with significant unmet medical needs and substantial long-term growth potential. All in all, our portfolio of novel medicines is robust and diverse and our late-stage pipeline is deep and rapidly advancing, uniquely positioning Axsome to deliver substantial near- and long-term value through multiple highly differentiated paths.

With just 3 years as a fully integrated R&D and commercial organization, Axsome is shaping the frontier of differentiated innovation in brain health. The fundamentals of our business have never been stronger, and we are excited to continue building on this foundation to drive further growth. With that, I’ll hand the call over to Nick to review our financial results for the quarter.

Nick Pizzie: Thank you, Herriot, and good morning, everyone. Our third quarter performance underscores the continued momentum of Axsome’s commercial portfolio and the breadth of our capabilities as an organization. We continue to advance multiple innovative therapies addressing diverse and critical needs in brain health, a foundation that is driving meaningful growth across our entire business. As Herriot mentioned, total product revenues for the quarter reached $171 million, representing a 63% increase year-over-year. AUVELITY continues to demonstrate impressive growth. Net product sales for the quarter were $136.1 million, up 69% versus last year. SUNOSI net product revenues for the quarter were $32.8 million, up 35% versus the prior year.

SUNOSI revenues consisted of $31.6 million in net product sales and $1.2 million in royalty revenue associated with SUNOSI sales in out-licensed territories. SYMBRAVO in its first full quarter on the market generated $2.1 million in net sales. These results reflect our continued top line growth and focused execution, driving increasing operating leverage across the business. AUVELITY and SUNOSI gross-to-net discounts for the third quarter were both in the high 40% range. We anticipate that AUVELITY and SUNOSI gross-to-net discounts will increase in Q4 to the low 50% range. SYMBRAVO gross-to-net discount for the quarter was in the mid-70% range, which we anticipate will remain elevated during the launch phase. Turning now to expenses. Total cost of revenue were $11.9 million compared to $8.4 million for the third quarter of 2024.

Our research and development expenses of $40.2 million decreased 11% compared to last year, primarily driven by the completion of our clinical trials for solriamfetol in ADHD and MDD. Our selling, general and administrative expenses of $150.2 million increased 57% compared to last year, primarily driven by commercialization activities for AUVELITY including the sales force expansion and our recently launched direct-to-consumer advertising campaign, along with the commercial launch of SYMBRAVO. Our net loss for the quarter was $47.2 million or $0.94 per share compared to a net loss of $64.6 million or $1.34 per share for the same period last year. The $47.2 million net loss this quarter includes $23.1 million of noncash stock-based compensation expense and a $13.2 million noncash charge related to contingent consideration.

We ended the third quarter with $325.3 million in cash and cash equivalents compared to $315.4 million at the end of 2024. We continue to believe that our current cash balance is sufficient to fund anticipated operations into cash flow positivity based on the current operating plan. And with that, I’d like to turn the call over to Ari, who will now provide a commercial update.

Ari Maizel: Thank you, Nick. Q3 represented Axsome’s first full quarter with 3 products, and our commercial team advanced efforts across multiple fronts of Axsome’s commercial business highlighted by strong performance for AUVELITY, a foundational first full quarter for SYMBRAVO and steady growth for SUNOSI. AUVELITY’s momentum in major depressive disorder continues to build with strong prescription growth, increased new writer activation and the initiation of strategic commercial investments. For the quarter, approximately 209,000 prescriptions were written for AUVELITY representing 46% year-over-year growth and 9% sequential growth. By comparison, the antidepressant market grew 1% year-over-year and was flat versus the second quarter of 2025.

Since our expansion of the psychiatry sales force earlier this year, average weekly new-to-brand prescriptions or NBRx has increased by approximately 35%. Our expanded team continues to drive broader and deeper engagement across prescriber segments, and we have made meaningful progress in the primary care setting. Approximately 1/3 of AUVELITY prescribers are primary care clinicians, and NBRxs from the primary care setting have increased by approximately 50% since the expansion. Approximately 5,000 new prescribers were activated this quarter, bringing the total number of unique prescribers to 46,000 since launch. In addition to strong demand growth, we continue to make progress with market access for AUVELITY. Commercial coverage increased from 73% to 75% this quarter, bringing total coverage to 85% of all lives across channels.

Importantly, we have also contracted with a third large commercial group purchasing organization or GPO effective August 1, which will support continued coverage efforts moving forward. Turning now to SYMBRAVO. The third quarter marks SYMBRAVO’s first full quarter on the market with early progress that is helping to establish a strong foundation for long-term growth. More than 5,000 prescriptions were written and over 3,300 new patients started SYMBRAVO in the quarter. Our targeted approach, including focused sales and marketing activity among headache specialists who drive the majority branded migraine prescriptions is effectively building awareness and driving trial. Feedback from patients continues to reinforce SYMBRAVO’s robust clinical profile.

SYMBRAVO’s MoSEIC technology, which enables rapid absorption while maintaining a long half-life resulting in strong efficacy is resonating with HCPs. In a recent survey of migraine treaters, key drivers of prescribing include SYMBRAVO’s multi-mechanistic targeting of the CGRP and prostaglandin pathways, fast migraine symptom relief, improvements in patient functioning and sustained freedom from migraine pain. We continue to make progress with SYMBRAVO market access and coverage with overall payer coverage at approximately 52% of all lives as of October 1. The proportion of covered lives in the commercial and government channels is 48% and 56%, respectively. We have also contracted with a second large GPO effective August 1 for potential coverage of SYMBRAVO.

We anticipate coverage for SYMBRAVO to expand and evolve throughout the balance of the year and into 2026. And finally, SUNOSI delivered another quarter of strong and steady performance with approximately 53,000 prescriptions representing 12% year-over-year and 5% sequential growth. By comparison, the wake-promoting agent market grew 4% year-over-year and 3% quarter-over-quarter. More than 460 new clinicians prescribed SUNOSI in the quarter, bringing the total cumulative prescriber base to approximately 15,100 since launch. Payer coverage for SUNOSI remains at approximately 83% of lives covered across channels. Overall, the third quarter represented another period of strong commercial performance across Axsome’s growing portfolio of differentiated CNS products.

With continued execution on AUVELITY and SUNOSI and the establishment of the growth foundation for SYMBRAVO, Axsome is driving increased demand, growing prescriber and patient engagement and expanding access to our products. We remain confident in Axsome’s continued growth potential and look forward to sharing future updates on our commercial progress. I will now turn the call back to Darren for Q&A.

Darren Opland: Thanks, Ari. That concludes our prepared remarks. Daryl, please open the line for Q&A.

Operator: [Operator Instructions] Our first questions come from the line of Leonid Timashev with RBC Capital Markets.

Leonid Timashev: Congrats on the quarter. I actually wanted to ask on SYMBRAVO and your ability to extrapolate what you’re seeing in the third quarter out to fourth quarter in 2026. I guess maybe can you talk about the increased depth of prescribing you’re seeing and maybe what you’d like to see on the ground before you invest more in the launch and potentially in areas of bottleneck that are stopping additional patients from coming on therapy?

Ari Maizel: Leon, thanks for the question. This is Ari. Obviously, it’s still very early in the SYMBRAVO launch. And our — what we’re seeing so far is very positive in terms of HCP and patient response. The drug is performing as well as we expected in the real-world setting. We are — as a reminder, we’ve taken a very targeted and focused approach, focused on the top 150 headache centers as well as large neurology practices around the country. And our intent is to try to penetrate as many of those providers as possible. And as we observe the impact, we’ll make further decisions around expansion or incremental investment for SYMBRAVO. But at this time, we’re really pleased with the early response. There’s still a lot of work to do, and we’re in the early days.

But we are really focused on increasing prescribing in our targeted clinicians. As we mentioned earlier, we’ve seen improvements in market access, which is also a key area of focus for us, and we’ll share additional updates as the brand progresses.

Operator: Our next questions come from the line of Marc Goodman with Leerink Partners.

Basma Radwan Ibrahim: This is Basma on for Marc. We have a question on AUVELITY regarding the primary care segment, which seems to be contributing more and more to the scripts right now. Do you see this segment as a key growth driver for AUVELITY? And how do you envision growing this segment? Is it mainly through sales force expansion? That’s it for us.

Ari Maizel: Yes. Thanks so much for the question. Yes, we believe primary care is a really important specialty area for AUVELITY in MDD, is largely because most patients in the U.S. present to primary care office upon diagnosis and many stay with primary care throughout the course of their depression episodes. As you mentioned, we are seeing very positive response in the primary care setting. It now represents roughly 1/3 of our subscriber base, and we’re seeing strong performance in terms of new patient starts as well as overall prescriptions. In terms of how do we further grow the primary care segment, part of that is just our focused sales force effort. Obviously, we’ve expanded the team several times, and that has enabled us to reach more primary care clinicians on a routine basis.

We believe the expanded market access that we’ve been able to accomplish over the past couple of years is also helping to ease the prescribing path for a primary care treater that may not have as many resources to support PA processing. And then finally, our direct-to-consumer campaign, which launched in the quarter, we’re seeing early positive signals in terms of patient awareness, patient requests for the product, and we expect that to facilitate further growth in the primary care setting along with the psychiatry setting.

Operator: Our next question comes from the line of Pete Stavropoulos with Cantor Fitzgerald.

Pete Stavropoulos: Congrats on the quarter. There is a clear distinction in the clinical profile of AXS-05 versus antipsychotic. Given the differences in clinical data for Alzheimer’s agitation and the mechanisms, what are your expectations for AUVELITY adoption if approved? And how do you plan to drive uptake in the various channels? And have you identified key elements from REXULTI commercialization and marketing strategy, you would do differently to ensure a greater uptake and success?

Ari Maizel: Yes. Thanks for the question. Obviously, we’re very optimistic about the impact AXS-05 can have on the Alzheimer’s agitation market. In terms of our focus area, what we have seen in our early launch preparation is that there are a mix of specialties that are treating agitation. Primary care is the largest. There are also geriatric psychiatrists, neurologists and then traditional psychiatrists. Of course, long-term care is an important setting of care for Alzheimer’s patients. And our anticipation is that we’ll cover all of those different specialties and settings of care with our efforts. We see a high degree of overlap between Alzheimer’s agitation and major depressive disorder in terms of prescriber base. And so we’ll be able to leverage our existing sales force.

We see high synergies related to promotion there. And of course, we will need to invest in long-term care promotion, which is something we don’t currently have, but do anticipate bringing online if the drug is approved. In terms of REXULTI’s promotion, our — we don’t typically comment on other companies and their promotional mix. But we have been following along, and they’re having really nice success with REXULTI. And so there are some learnings that we’ll incorporate into our launch strategy if an AXS-05 is approved.

Operator: Our next question comes from the line of Sean Laaman with Morgan Stanley.

Sean Laaman: I’m just wondering on the sales force expansion. I think you just mentioned on the call, you’re up to 46,000 prescribers, added 5,000. Given the bump in SG&A, I’m wondering how much capacity you think you’ve got in the existing sales force and when you might have to go again and how that ties into your thinking about the time to cash flow positivity?

Ari Maizel: Yes, I’ll take the first part of the question. We are pleased with the size of our sales force at the moment. It is driving considerable growth in terms of new prescribers as well as new patients. We previously shared that we intend to add some additional representatives in support of the Alzheimer’s agitation approval. And we have started our efforts in terms of laying the groundwork for future expansions, although we haven’t quite settled on a final number. That is something that we’re looking to do early in 2026.

Nick Pizzie: Yes. Maybe just a little bit on the SG&A for the quarter. This is Nick. So in Q3, the SG&A increased slightly. That was really driven by our launch of the DTC campaign that we launched in September. Additionally, we had a full quarter of commercialization activity for SYMBRAVO. So even with that, if you take a look at our net loss on a cash basis, we continue to improve quarter-over-quarter as well as on a GAAP basis, continue to improve on the net loss. So no changes as it relates to our outlook for cash flow positivity.

Operator: Our next question comes from the line of Ash Verma with UBS.

Ashwani Verma: Just on the AD agitation application, can you comment on how many days past you are after the application filing? Are there some investor discussion going on whether you’re past the 60 days and that’s unlikely to get a priority review? And then any implications that you can draw from the government shutdown to your filing application process review and how this may play out?

Ari Maizel: Sure. So as is our practice, we haven’t disclosed the data of the submission, but the FDA typically let sponsors know, say, up to 74 days following the submission when — on a potential acceptance. We don’t see any potential impact from the shutdown for the timing. So we’ll — as we said, the next update that we expect to share is potential acceptance decision.

Operator: Our next question comes from the line of Andrew Tsai with Jefferies.

Lin Tsai: Great execution this quarter. Maybe shifting gears to the pipeline. You’ve got 2 Phase III readouts with SUNOSI for binge eating and shift work disorder. So can you talk a little bit about the study designs, what positive data would entail for — in order for you guys to file 2 more sNDAs next year or 2027?

Herriot Tabuteau: Sure. As it relates to binge eating disorder, it’s a standard parallel-group study design. And that would be the first study that we would need in order to be able to file an sNDA. So then based upon the results of that study, we would intend to initiate another trial, so we would need 2 studies for that. Other indications for solriamfetol include ADHD and where we currently have one positive Phase III trial for that in adults, and we’re looking to start our second study, which would be in pediatric subjects or pediatric patients in the fourth quarter.

Operator: Our next question comes from the line of Ami Fadia with Needham & Company.

Ami Fadia: My question is just sort of broader, stepping back. You’ve got a couple of products in the market, making your way towards cash flow positively and several other late-stage assets. Sort of from a long-term strategic perspective, where are you in terms of your thinking around the portfolio? Are you looking to add additional assets to drive sort of operational efficiencies over the next couple of years? Or do you think that you’ve got enough in late stage that focuses really more on execution on those assets?

Herriot Tabuteau: Thank you for the question. We’re in a very — we’re in a unique position from the perspective of — as you mentioned, we do have 3 marketed products which are still in relatively early stages of launch. So there’s a lot of growth ahead. And also we’re very fortunate that the period of exclusivity for these products goes out into the next decade or a couple of decades. So that’s a great position to be in. And on the back of that, there is the next wave of products which we would — products and indications, which we would expect to be approved over the next couple of years. We talked about the sNDA filing for Alzheimer’s disease agitation and the planned NDA filing for AXS-12. And then of course, there’s AXS-14 for which we intend to launch our next Phase III trial.

So all of that means that we really do not need to do anything extra as it relates to the pipeline in the near term. But that would be, I think, the standard approach, and our approach is always to make sure that we’re ahead of the curve. And so as it relates to that, we are taking the opportunity of the position that we’re in to field inbound as it relates to potential additions to the pipeline, which could be complementary. So we’re not going to quit while we’re ahead. And we’ll continue to make sure that we make very good strategic decisions as it relates to potentially enhancing the pipeline, and we’re in a position whereby we can be very choosy about what we bring on board.

Operator: Our next question comes from the line of David Amsellem with Piper Sandler.

David Amsellem: I had a question on reboxetine. I wanted to get your latest thoughts on how you’re thinking of the commercial opportunity, particularly given that you’ll be entering the market more or less around the same time as oveporexton, the first orexin 2 receptor agonist. So how are you thinking about the competitive dynamics here? How are you thinking about sizing this opportunity? Just wanted to get your latest thoughts on the product.

Herriot Tabuteau: Yes. So I think we’ll all tackle that. One thing which is really interesting about reboxetine is its focus on norepinephrine reuptake inhibition. And that is a common pathway for the orexins. So the pathophysiology of the disease is orexin neuron loss, then decreases the production of norepinephrine. And so then — so we — this is — the reboxetine works in very logical, rational way in terms of the pathophysiology of the disease. So we’re very excited about the product profile because we know from our experience in the sleep space with SUNOSI that there is still very high unmet medical need. Ari?

Ari Maizel: Yes. And I’ll just add, when you look at the clinical profile that was observed in the Phase III trials, great efficacy in cataplexy, nonstimulant daytime treatment, favorable tolerability profile. These is a lot to like about it, and what we hear from KOLs and sleep experts is that many patients require a polypharmacy. There’s a lot of trial and error. And even with the entry of a new mechanistic approach, we believe that there will still be significant unmet need, which creates opportunity for AXS-12 in those patients.

Mark Jacobson: And maybe just one other add is with respect to sizing, we see incredibly high synergy, almost near perfect synergy with the current sales and marketing infrastructure that we have in place for SUNOSI right now. So very, very, very complementary to what’s already in place. So we’re excited about that.

Operator: Our next question comes from the line of Joon Lee with Truist Securities.

Joon Lee: Congrats on the strong quarter. Your commercial execution on SUNOSI is quite impressive. Any idea where the demand for SUNOSI is coming from? Is it NT1, NT2, IH or something else? And given your strength in combining products, any thoughts on combining SUNOSI with AXS-12 to address both EDS and cataplexy? Or do you think it’s just better to keep them a la carte?

Ari Maizel: Yes, I’ll take the first part of that question. We’re seeing sort of — the predominant growth is coming from the OSA segment. There is significant unmet need in terms of excessive sleepiness with OSA patients. And it represents roughly 2/3 or so of the overall prescribing for SUNOSI, and we are seeing very strong demand for SUNOSI with those patients. Narcolepsy, of course, is an important component of the SUNOSI sales mix, but what we’ve seen particularly over the past couple of years is a greater awareness of excessive sleepiness among OSA patients. And as a consequence, we’re seeing increased utilization there.

Herriot Tabuteau: Yes. And as it relates to your question about whether it should be an a-la-carte approach for AXS-12 and SUNOSI, given how complementary the planned indications are. Our priority is to make sure that we get the product approved. That’s first and foremost. So let’s start with that. And that’s going to accomplish our main goal, which is to provide clinicians extra treatment options. And clearly, given how the patients are treated with narcolepsy, given the varied symptomatology, probably undoubtedly, there would be patients who receive both SUNOSI and AXS-12. And our goal is to provide clinicians the data such that they can treat the patients in the best way that they see fit.

Operator: Our next question comes from the line of Ram Selvaraju with H.C. Wainwright.

Raghuram Selvaraju: Congratulations on all the progress. Just with respect to SYMBRAVO, I was wondering if you could elaborate on the number of centers that you expect to target in the next wave after the initial 150 headache centers. And also if you could tell us a little bit about the timing with which you expect the DTC campaign for SYMBRAVO to be engaged, if we should be thinking about the time line as being similar to the time line with which you initiated the DTC promotional activity in support of AUVELITY.

Ari Maizel: Thanks, Ram. So regarding the, I guess, increase in number of centers, the way to think about it is right now, we are really focused on the predominant headache centers and headache specialists in the country. A future expansion would enable us to actually expand out more into the primary care market where you might have a heavy proportion of migraine treaters. And so right now, we feel very good about our coverage of headache centers and headache specialists, but that next wave would really be more about primary care expansion. As it relates to DTC, I think it’s a little premature to talk about potential timing. If you look at AUVELITY and our timing related to our DTC launch, it really was a function of ensuring we had a strong foundation of HCP prescribers support from a prescriber perspective.

We have reached a critical mass in terms of market access, and we had a sales force size that was big enough to support the increase in patient requests coming from a DTC campaign. So when that might happen, obviously, we’re focused on execution across all fronts, and we’ll evaluate as the brand progresses.

Operator: Our next question comes from the line of Jason Gerberry with Bank of America.

Dina Ramadane: It’s Dina on for Jason. Congrats on the quarter. Just on AXS-05 for Alzheimer’s disease agitation, could you maybe share your understanding of the clinical profile bar that’s necessary for priority review under breakthrough designation? Is there a requirement that AXS-05 shows efficacy benefit relative to REXULTI? And maybe how do you think investors should think about that scenario and the read-through to the ACCORD trial? And then just a quick follow-up on your comment on AXS-05 ADA long-term care promotion. Could you just maybe detail what those efforts look like? Are there docs that are affiliated with long-term care facilities? I appreciate any additional color there.

Mark Jacobson: So just one thing just to share, our base case here is always a standard review for the application. And we are eligible and — for a potential priority review, but our understanding is that currently, the default position for the FDA for any application is standard review. And with respect to like quantitative efficacy bars, that’s not how it works, right? It’s — so it’s not a specific or again, quantitative analysis that the agency does. So it’s hard to give you anything there for what may or may not go into an analysis like that. But again, our base case has always been standard review. And I think we will — as we said, we’ll keep people posted on a potential acceptance decision as I think the next thing that we’d expect for the course of the review.

Ari Maizel: Yes. And Dina, in terms of your long-term care question, it’s a little different than traditional outpatient facilities where you may be calling on MDs, NPs, PAs along with office staff. In long-term care facilities, there’s a significant nursing staff, pharmacy directors, medical directors. Of course, there are physicians, NPs and PAs that will make rounds in long-term care, but they also are treating patients in the community. And so there is a synergistic effect of the community-based promotion for those clinicians that go into long-term care. So it is a little bit of a different approach, which is why we feel it’s necessary to have a dedicated team focused on long-term care facilities if the drug is approved.

Operator: Our next question comes from the line of Yatin Suneja with Guggenheim Partners.

Yatin Suneja: One more question on the ADA. How do you think about the AdCom? Is that going to be required given that we already had one for the space with REXULTI? Just curious to hear your thoughts on how you are thinking about it.

Mark Jacobson: In AdCom, that’s something companies find out on potential acceptance decisions for FDA. So stay tuned on that.

Operator: Our next question comes from the line of Graig Suvannavejh with Mizuho Securities.

Graig Suvannavejh: Congrats on the continued success across the board, both commercially and on the pipeline. Just want to talk about AUVELITY commercially. I just wanted to revisit the gross to net and its evolution. I think you mentioned that the gross to net was in the high 40s in the third quarter. I’m wondering what led to that happening and whether there are any unique onetime events or items that contributed to that. And also just looking forward on the progress you’ve made with contracting. Are there any other significant gains that you’re looking forward to? I mean it seems like you’re in a pretty good place, but just wondering just in the future, how we should think about that dynamic.

Nick Pizzie: Graig, this is Nick. Thanks for the question. You’re correct, AUVELITY discount for the quarter improved from the mid-50s to the high 40s in Q3. So pleased with the net price improvement around AUVELITY. And something that did change during the quarter is that we received additional 28 million lives in Q3. And so we were able to see those lives covered in an improved fashion in first-line or first switch. So improved access, improved amount of patients covered along with improved net price from a GTN perspective. Ari, do you want to take the second question?

Ari Maizel: Yes. So I think, first and foremost, we’re at 85% total lives covered, which we’re really pleased with. We shared on the opening remarks that we signed the third large GPO. Our expectation is to continue to add additional covered lives. Our goal is to try to get to as close as 100% as we can. Obviously, with the third GPO signed, that will enable additional covered lives moving forward. As you know, it’s very difficult to predict exactly when those new PBM contracts will come online. But we do feel optimistic that there’s great interest and the team is continuing to focus on driving additional covered lives moving forward.

Operator: Our next question comes from the line of David Hoang with Deutsche Bank.

David Hoang: Congrats on the quarter. I just wanted to go back to the planned sales force expansion for ADA. Recognize that it’s early days, but could you maybe bookend or at least point us towards maybe a minimum number of reps that you think would be sufficient to execute a successful launch in that indication? And are those numbers already contemplated in your guidance for reaching cash flow positivity?

Ari Maizel: Yes. Thanks, David. The plan would be to expand the team if the drug is approved. In terms of the overall number, we’re still working through that. There’s obviously 2 pieces to it. One is, are there clinicians we don’t — we would like to cover that, we don’t currently cover with the current team and what sort of incremental headcount numbers that we need to reach them. And then the long-term care area is something that we’ll need to think through in terms of overall headcount needed to appropriately educate and engage with long-term care setting. So a little early to share a specific number, but the goal is to expand the team if AXS-05 is approved, and we’ll share additional updates in the future.

Unknown Executive: And David, would you mind just repeating, I think you had a question about cash flow positivity.

David Hoang: Yes, whether the ADA — anticipated ADA sales force expansion is already contemplated within the existing guidance or cash flow positivity?

Nick Pizzie: Yes, David, it’s Nick. Absolutely, it’s contemplated. We — the way that we forecast our cash is assuming that everything is positive as it relates to clinical and regulatory outlooks and then the additional associated costs with that. So obviously, upon the launch, you would have — it would be capital intensive in the first few quarters. And then ultimately seeing an ROI. So yes, the answer is we have already included that in our cash flow.

Operator: Our next question comes from the line of Troy Langford with TD Cowen.

Troy Langford: Congrats on all the progress in the quarter. Just with respect to AUVELITY, approximately how many quarters do you think it will take to see an impact from the recently launched DTC campaign on prescriptions? And do you think we’ll see any sort of inflection in the current trajectory of prescriptions? Or do you think we’ll see just more of a continued gradual upward trend?

Ari Maizel: Yes. Thanks, Troy, for the question. In terms of number of quarters, it’s hard to predict exactly when the most significant impact from DTC will hit. But one of the things that we’re looking at is changes in our weekly new patient starts. We have begun to see an increase in new patient starts. In general, it’s sort of 8 to 12 weeks is when we’d be looking for anything significant in terms of DTC impact. Right now, we feel like it’s still early days, but we’re pleased with some of the trends that we’ve observed, and we’ll continue to provide updates.

Operator: Our next question comes from the line of Myles Minter with William Blair.

Myles Minter: Just the first on the third GPO contract in those P&T meetings coming online. Would you expect that commercial covered lives moving from 75% to somewhere in the mid-90% to have a similar favorable gross to net impact, as you saw with the 28 million lives coming online in the third quarter there? And then secondly, just given the FDA news this morning with uniQure and then George Tidmarsh, obviously, resigning. Just anything you can say about the confidence of the FDA as you work through the regulatory process on the CDER side?

Nick Pizzie: Myles, I’ll take the first one on GTN. I think it’s too early to say where GTN will land with an additional contract now at hand. So — but we are pleased, as we shared with where we are with the improvement in GTN as well as the improvement in the amount of lives covered and the formulary access. So stay tuned for where that — where we will land. But we will continue to negotiate in a similar fashion as we have previously, ensuring that we maintain long-term value and try to have as many patients covered as possible.

Mark Jacobson: And on the FDA side, right now, things are status quo for us in terms of our dialogue and interactions with — across the various divisions that we engage with.

Operator: Our next question comes from the line of Madison El-Saadi B. Riley Securities.

Madison Wynne El-Saadi: Congrats on the quarter. On AUVELITY and SUNOSI as well, but more so AUVELITY, are you seeing per prescriber activity trending upward? Just trying to kind of get a sense of how much growth here is sensitivity to promotion versus more organic growth? Obviously, the sensitivity to promotions is great. But my sense is that there’s also some organic growth here as well. If you could just comment and then maybe a follow-up.

Ari Maizel: Yes. Thanks for the question, Madison. We are — I guess the way that I would recommend sort of thinking about the growth is it’s a function of 2 things: productivity among the existing writer. So the number of prescriptions per existing writer and then our ability to add additional new writers into the prescriber mix. And for both brands, we’re seeing those things come to fruition, which I think is a testament to the impact that these medicines are having on patients’ lives, the positive reinforcement that these clinicians are hearing from their patients and our team’s ability to engage with them and educate them on a routine basis. So those are things that we’ll continue to look to drive moving forward.

Madison Wynne El-Saadi: Got it. Understood. And then secondly — so we have 4 Phase III trials planned to initiate this quarter. Just wondering on the cadence of those, should we think of these as almost parallel launches? Or will these kind of come in a sequence throughout the remaining quarter?

Herriot Tabuteau: Yes. So with 4 Phase III trials launching, there are a lot of moving parts from an operational perspective to make sure that, that happens. So it’s very unlikely that they’re all going to happen on the very same day. So do expect a natural cadence. It’s nothing that we’re preplanning. However, we are working towards and are on track for the initiation of those studies in the fourth quarter.

Operator: Our last questions will come from the line of Benjamin Burnett with Wells Fargo.

Unknown Analyst: This is Craig on for Ben. So just a couple from us here. So given your successful track record of getting products through the finish line, I’m curious, can you provide a little bit of color of how your regulatory interactions in regards to the sNDA for AXS in ADA has maybe differed from some of those past programs? And I guess second question, in regards to narcolepsy, I feel like we’re seeing a lot of estimates of the epidemiology of those indications kind of expanding and expanding further. So out of curiosity, what do you guys think is driving that? And are you seeing growth in IH, NT1, NT2, any one particular area? Yes, any color there would be helpful.

Mark Jacobson: I’ll take the first part. So it’s ordinary course at the moment based on where we are in the cycle, in terms of the submission for AXS-05 in AD agitation.

Herriot Tabuteau: Yes. And from an epidemiological perspective, for narcolepsy you’ve got to look at the surveys that are done and the quality of the surveys. And however, one aspect of the market that we’ve always pointed to is the fact that in this orphan indication, there’s still a large percentage of patients who, one, have remained diagnosed in the past; and secondly, who are treated. So certainly, as there is more interest in the space as more products are being developed and coming to market, one would expect that there would be an increase in awareness and maybe that’s what you’re seeing. Anything that you would add, Ari?

Ari Maizel: No. I think you mentioned NT1, NT2, IH, I think that there’s a lot of symptomatology overlap in different formalized diagnoses, which may muddy the waters a little bit. But from our perspective, we feel good about our current estimates, which is around 185,000 people in the U.S. suffering from narcolepsy, and that’s what we’re building our plans around.

Operator: There are no further questions at this time. I would now like to hand the call back over to management for any closing comments.

Herriot Tabuteau: Thank you. And thanks, everyone — thank you to everyone for joining us this morning. As we’ve highlighted today, Axsome delivered another strong quarter. We continue to drive robust growth across our commercial portfolio, and we are well positioned to deliver significant long-term value through our advancing pipeline. We look forward to sharing our continued progress over the coming months. Thank you.

Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.