And then from a cash flow positivity or profitability, we are still at the early stages of the early launch and a bit more than a year removed from the acquisition of Sunosi. We’ve modeled various scenarios, and based on the success that we’ve had thus far, we feel very confident of our ability to be cash flow positive. As you’re aware, the launches by nature are very volatile, and as such, we haven’t provided any guidance on a specific timeline for cash flow positivity. Herriot, do you want to take the next question?
Herriot Tabuteau: Yes. No, thanks, Marc for the other question. We haven’t provided a specific percentage enrollment in our trials lately. However, AD agitation, we are confident that we should be able to have results this year. Operator, our next question?
Operator: Our next question is coming from Graig Suvannavejh from Mizuho. Your line is now live. Graig, your line is now live, perhaps your phone is on mute. Go ahead, Graig your line is now live.
Graig Suvannavejh: Can you hear me?
Operator: Yes, please, go ahead.
Graig Suvannavejh: Thank you. Okay, great. Thanks. So sorry about that. Congrats on the quarter. Just two questions. One, just can you comment on the Auvelity DTC efforts? And any thoughts around how that effort might evolve in 2024? And your level of satisfaction with what you’ve done so far, and what’s needed on a go-forward basis? And then secondly, just as we think about the potential of solriamfetol in MDD. Could you just remind us on how we should think about the differential positioning of that product with Auvelity? Thanks.
Ari Maizel: Hey, Graig. Thanks so much. This is Ari. Appreciate the question. As you know, we do have a DTC effort today largely focused on digital engagement. We’ve been very pleased with that investment so far. What we observed through market research is nearly eight in 10 patients who ask for Auvelity receive it. And so we are very optimistic about continued investment in consumer advertising, and we are assessing additional investments at the moment. And so we would expect to share some updates later in the year based on whether we intend to increase the investment around consumer advertising. As it relates to solriamfetol in MDD, as you know, MDD is a highly heterogeneous condition. Not all patients respond to the same types of treatments, and because there are overlapping symptoms with other illnesses in particular symptoms that may be more difficult for some patients than others, there’s usually room for multiple treatment options to help these patients.
And so until we have more data around solriamfetol and MDD, it’s a little premature to talk about co-positioning with Auvelity. But based on our experience in this space, we do believe that there will be opportunities for both products to help patients achieve meaningful symptom relief.
Graig Suvannavejh: Thank you.
Operator: Thank you. Next question is coming from David Hoang from Citigroup. Your line is now live.
David Hoang: Thanks. Good morning, and thanks for taking the questions. Congrats on the quarter. So maybe just two from me. First, on Auvelity, could you provide any color around your ongoing payer discussions in the commercial channel and expectations to improve the coverage there above the current, I think 48%, or so of covered lives? And then regarding solriamfetol in ADHD, once the results of the FOCUS study are in hand, what else would be needed to proceed to an FNDA filing there if those results are positive? Thanks so much.
Herriot Tabuteau: Sure. So we’ll take the questions in reverse order. For solriamfetol, the FOCUS study is in adults and we will be launching a Phase 3 trial in the pediatric population. So both of those studies, both of those patient populations are needed for an NDA filing.
Ari Maizel: Yes. And related to the payer discussions, as you mentioned, we have roughly 48% coverage in commercial channels, 70% overall across channels. The way we think about the payer dynamics is we are taking a very disciplined approach to contracting to preserve long-term profitability for our products. However, we do anticipate expanding coverage over time and remain actively engaged with health insurers to improve access for insured patients. I will mention that our current investments in both patient savings programs, as well as reimbursement services will support continued prescription growth at current levels of coverage, which as I mentioned before, remains 70% of lives for Auvelity.
Operator: Thank you. Our next question is coming from Myles Minter from William Blair. Your line is now live.
Myles Minter: Hey, thanks for taking the questions. Just on the Teva ANDA filings that I know are active, I noticed that you recently got new IP listed in the FDA Orange Book with the patent expires at 2043. Have you got Chapter 4 filings against those patents that we might not be aware of? And then secondly, just back on the 48% coverage in the commercial channel. That’s flat quarter-over-quarter, yet your conversations are progressing. What is the sticking point with some of these major payers that have yet to get online with Auvelity at the moment? Is it more about formulary positioning, risk benefit, or is it simply just coming down to price? Thanks.
Hunter Murdock: Yes. Thank you for the question. This is Hunter Murdock. So yes, we do have patents going out to 2043 and we do have Paragraph IV filings against them which we filed suit against. So it is public information that we do have those three Paragraph IV certifications relating to 2043 patents. So that’s with the Teva litigation.
Ari Maizel: And this is Ari. Regarding your comment on the 48%. Yes, it is stable quarter-over-quarter. Every payer discussion is different. In some cases, it’s related to ultimate price. In some cases, it’s related to utilization management parameters. And so we are progressing those conversations. We’re having meaningful discussions, but it takes time and they’re ongoing negotiations and hopefully, we’ll be able to share some updates next quarter.
Myles Minter: Okay. Thanks for the questions. Congrats on the year.
Operator: Thank you. Our next question today is coming from Yatin Suneja from Guggenheim Securities. Your line is now live.
Eddie Hickman: Hey guys. Thanks for taking my question. This is Eddie on for Yatin this morning. Regarding that Brexpiprazole increase in the long-term care channel since their ADA approval. Is that a good comp for how the Auvelity launch could inflect on upon approval? Or does the different safety profile or black spot warnings make Auvelity a more attractive option for this population? And then what additional commercial infrastructure would you need to see that kind of inflection, like Brexpiprazole saw if approved? Thanks.
Ari Maizel: Yes, thanks for the question. Just one clarification. We don’t have data to suggest increase in Brexpiprazole in long-term care. It’s in the Medicare channel. And so I think additional data would be needed to understand whether it’s in the long-term care setting or in outpatient. And I do think it’s a little premature to suggest that it’s a good analog for AXS-05. These products do have different clinical profiles. AXS-05 is a non-atypical antipsychotic. It has a slightly different profile overall and we expect there to be meaningful growth within that indication if approved in both the outpatient settings as well as long-term care as Herriot suggested earlier in our trials, we are focused in outpatient settings with a hope to delay patients going to long-term care facilities.
In terms of commercial infrastructure, we are obviously evaluating our salesforce size and structure relative to the overall pipeline and we do expect to have a meaningful presence in long-term care facilities. However, our existing salesforce is primarily focused on outpatient care practices, which we expect will continue even for ADA. So more details to come, but we feel very confident that we’ll be able to have an efficient selling effort based on the shared call points or most of the indications that exist in our pipeline as well as our on-market products.
Eddie Hickman: Great. Thanks and congrats again.
Operator: Thank you. We have time for questions from two more analysts. Our next question is coming from Matt Kaplan from Ladenburg Thalmann, your line is now live.
Matthew Kaplan: Hi, thanks for taking the questions, and good morning guys. Just maybe a question for Ari in terms of now that you’ve completed the salesforce expansion, when should we start to see an impact of that new salesforce? And I guess over the course of the year, is it really first half or second half when we start to see them gaining traction?
Ari Maizel: Yes. Thank you for the question. We expect to see a ramp in terms of impact over the course of the year. Obviously, the majority of the expansion representatives were hired late last year. We completed training in January of this year. It takes time to go through call cycles and to build confidence with the brand stories and messaging and also to expand our reach into the primary care setting. And so we expect the build to occur over the course of the year. We’re starting to see some meaningful impact in terms of call activity and we would expect demand trends to have corresponding increases over the course of the year.
Matthew Kaplan: Okay, that’s helpful. And then maybe a question for Herriot. You gave some added detail in terms of what is necessary for filing FNDA and ADHD. In terms of the other indications you’re pursuing in Phase 3 for solriamfetol, MDD, binge eating disorder and shift work, what would be necessary there? Is it — they both, they all include two Phase 3 trials or could some be with one?
Herriot Tabuteau: Sure. With regards to solriamfetol in MDD. So there we anticipate that we would need two Phase 3 trials. So we’re launching our first Phase 3 trial, as you know this quarter binge eating disorder, similarly, we anticipate that we will need two Phase 3 trials. And we’re also on track to launch the first Phase 3 trial this quarter. For shift work disorder, we only need one Phase 3 trial to file an FNDA.
Matthew Kaplan: All right. Well, thanks for taking questions guys.
Operator: Thank you. Our final question today is coming from Vikram Purohit from Morgan Stanley. Your line is now live. Vikram, perhaps your phone is on mute.
Vikram Purohit: Hi, good morning. Can you hear me?
Operator: Please proceed.
Vikram Purohit: Thank you. Good morning. Thanks for taking our questions. So we had two commercial questions one on ADA, one on MDD. So for ADA, assuming ADVANCE-2 is positive and AXS-05 is approved for the indication. What would you expect the annual duration of therapy to be in this setting, given the potential differences in the number and duration of agitation episodes that patients with AD can experience? And then secondly, in MDD, do you think Auvelity sales guidance is a possibility this year? And if so, what are some of the metrics and aspects of the launch that you’re monitoring to gauge whether guidance is reasonable to provide? Thanks.
Herriot Tabuteau: Thanks for the questions. With regards to duration of treatment and Alzheimer’s disease agitation. So, Alzheimer’s disease agitation is viewed as a chronic condition and that’s how we’ve been studying it. And that is also reflective of how the FDA thinks about it from feedback that we’ve gotten from them. So we do have, as you know a long-term open label safety extension trial, which is ongoing. So patients have been on drug now for a fairly long time. So the study, it’s a one-year trial.
Nick Pizzie: Yes sure, Vikram. Hey, this is Nick. As it relates to the sales guidance, given the relatively short period of time since launch and evolving dynamics, including the increase in sales force effort as well as variability with market access, we are not ready to provide forward-looking guidance on sales, which is likely the case for the entirety of 2024 at this point.
Vikram Purohit: Got it. Thank you.
Operator: Thank you. We reached end of our question-and-answer session. I’d like to turn the floor back over to management for any further or closing comments.
Herriot Tabuteau: Well, thank you for taking the time to join us for today’s quarterly update. 2023 was a strong year for Axsome. We entered 2024 with a growing commercial business and a late-stage neuroscience pipeline that encompasses five innovative candidates in development with the 10 serious neuropsychiatry indications. We look forward to providing multiple updates throughout the year on our progress. Thank you and have a great rest of your day.
Operator: Thank you. That does conclude today’s teleconference webcast. You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
