Axsome Therapeutics, Inc 2026 Q2 Earnings Call

Good morning, everyone, and welcome to Axsome's second quarter 2026 earnings conference call. Joining me today to discuss our results for the quarter are Dr. Herriot Tabuteau, Chief Executive Officer, Nick Pizzie, Chief Financial Officer, and Ari Maizel, 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. Before we begin, I encourage everyone to visit the investors section of our website to find the press release and presentation for 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. With that, I'll hand it over to Herriot.

Thank you, Ashley, and good morning, everyone. The second quarter was highly productive for Axsome as we grew our commercial business robustly and made important regulatory and clinical progress across our innovative neuroscience pipeline. In the second quarter, our commercial portfolio generated $218 million in net product revenue, a 46% increase year-over-year, driven by strong performance for AUVELITY and SUNOSI. In the quarter, we launched AUVELITY in Alzheimer's disease agitation and completed the expansion of the AUVELITY sales force. Early metrics for the sales force expansion and Alzheimer's disease agitation launch point to growth acceleration for AUVELITY. Underlying demand growth for SYMBRAVO is also accelerating, and we expect SUNOSI growth to continue outpacing the market, positioning us for continued strong growth across the entire commercial portfolio.

Later in the call, Nick will comment further on our financials, and Ari will provide additional detail on our commercial performance, including early observations on the Alzheimer's disease agitation launch. During the quarter, we also advanced our leading neuroscience pipeline of six innovative product candidates, which we are developing for 10 serious conditions. Our broad late-stage neuroscience pipeline positions us to potentially file on average one new NDA each year between now and 2030, delivering potentially significant value to patients and stakeholders. Following Ari's remarks, I'll provide an update on each of these programs. With that, I'll turn the call over to Nick.

Thanks, Herriot. Good morning, everyone. I'll begin with a review of our financial results for the quarter. Revenue increased to $218 million compared to $150 million in Q2 of 2025, representing a 46% year-over-year growth. Performance was driven by AUVELITY with steady growth from SUNOSI and continued strength in prescription demand for SYMBRAVO. We recorded net product sales for AUVELITY of $180.3 million in the quarter. That's a 51% increase compared to the second quarter of 2025 and an 18% increase quarter-over-quarter. SUNOSI net product revenue for the quarter was $35.8 million, representing a 20% year-over-year growth. SUNOSI revenue consisted of $33.8 million in net product sales, $1.5 million in royalty revenue associated with SUNOSI sales in out-licensed territories, and a half a million dollars in milestone revenue.

Net sales for SYMBRAVO were $2.3 million in the quarter. SYMBRAVO was launched in June of 2025 and had net product sales of $400,000 for the second quarter of 2025. The decrease of $1.8 million in net sales from Q1 of 2026 primarily reflects a prior period adjustment and increased utilization of our patient service program driven by underlying demand growth. As such, SYMBRAVO gross and net discount deviated from trend during the quarter into the high 80% range. We anticipate SYMBRAVO GTN to return to prior levels for the remainder of the year. Gross and net discounts for AUVELITY and SUNOSI were each approximately 50% for the second quarter. We continue to anticipate gross and net discounts for both products to improve throughout the year, consistent with prior year trends.

Turning to expenses, cost of revenue in the quarter was $13.6 million, representing 6% of total net revenue. Cost of revenue for the second quarter of 2025 was $13.4 million. Research and development expenses decreased to $46.2 million for the second quarter of 2026, compared to $49.5 million in the second quarter of 2025, which primarily reflects lower costs associated with AXS-05 and AXS-14. Selling, general, and administrative expenses in the quarter were $208.1 million compared to $130.3 million for the second quarter of last year. The increase was primarily driven by commercialization activities for AUVELITY and SYMBRAVO.

Net loss for the quarter was $51.3 million, or $0.99 per share, compared to a net loss of $48 million, or $0.97 per share for the second quarter of 2025. Net loss in the quarter includes $27.1 million in stock-based compensation expense. We ended the quarter with approximately $320 million in cash and cash equivalents. This compares to $323 million as of end of 2025. We are seeing continued improvement in operating leverage while investing behind our key commercial opportunities and pipeline priorities. We continue to expect that our current cash balance is sufficient to fund anticipated operations into cash flow positivity. I'll turn the call over to Ari with a commercial update.

Thanks, Nick. During the second quarter, we saw strong underlying demand growth across our portfolio of three differentiated medicines. During the quarter, we further strengthened our commercial foundation, positioning us to drive growth across the portfolio over the balance of the year. AUVELITY. In the quarter, we launched AUVELITY in the Alzheimer's disease agitation market and completed the expansion of the AUVELITY sales force. I'm happy to share that early metrics indicate that these two developments are already beginning to have a meaningful impact on demand growth, positioning AUVELITY for continued momentum over the balance of the year. During the first eight weeks following the launch in this indication, new-to-brand prescriptions among patients 65 years of age and older increased 126% compared to the same period in the prior quarter, reflecting expanding adoption in this patient segment.

New-to-brand prescriptions represent new patients starting on AUVELITY for the first time and are considered a key leading indicator of growth. While it's early days in the commercialization of AUVELITY in Alzheimer's disease agitation, we are excited by the initial feedback that we have received from prescribers, which includes positive anecdotal evidence of AUVELITY's differentiated clinical profile reflected in real-world patient experience. Providers and care partners alike view the reduction in agitation symptoms and safety and tolerability profile favorably. These early experiences have reinforced our belief that AUVELITY has the potential to transform the treatment paradigm for Alzheimer's disease agitation. We look forward to sharing continued progress in the months ahead. We are also beginning to see the early impact of our expanded sales organization, with overall new-to-brand prescriptions in the second quarter of 2026 increasing 26% compared to the first quarter of 2026.

This momentum has continued into the third quarter. The expanded sales force activated more than 6,800 new AUVELITY prescribers in the quarter, representing 21% growth versus the previous quarter, bringing the total number of unique prescribers since launch to approximately 69,000. The inflection in new-to-brand prescriptions and increased velocity of new writer activation are strong leading indicators of our expanded sales force investment, resulted in market share gains for both new-to-brand and total prescriptions in the quarter. We expect these trends to continue to build in Q3 and Q4, translating into positive TRx trends, further market share penetration. Total prescriptions for AUVELITY in the second quarter reached approximately 266,000, an increase of 34% year-over-year and 12% sequentially, substantially outpacing the antidepressant market, which grew 1% and 2% in the same time periods, respectively.

In addition, AUVELITY market access continued to improve during the quarter, with coverage now at approximately 89% of total lives across channels, including 82% of commercial lives and approximately 100% of lives in the government channel. Our market access team is working closely with payers in both the commercial and government channels. We expect patient access for AUVELITY in both the MDD and ADA markets to continue to expand and evolve. Taken together, we expect the momentum from the sales force expansion, continued growth in MDD, and uptake in Alzheimer's disease agitation to drive continued growth over the rest of the year. For SYMBRAVO, demand was strong, growing 30% quarter-over-quarter to approximately 23,500 total prescriptions. Prescriber and patient feedback continue to be very positive, supporting our commercial strategy to drive prescription volume while improving market access to support sustained growth over time.

As mentioned on our prior earnings call, based on the strong demand for SYMBRAVO to date, our previously announced sales force expansion to approximately 150 sales representatives is substantially complete. Following the previously announced addition of approximately 17 million lives in Q2, overall payer coverage is now at approximately 57% of lives covered across channels, including approximately 56% of commercial lives and 57% of government lives. We expect coverage for SYMBRAVO to further improve moving forward. SUNOSI delivered another quarter of durable growth, with approximately 61,000 total prescriptions written during the quarter, representing 14% year-over-year growth and 8% sequential growth, compared to a 1% decline and 2% increase for the wake-promoting agent market in the same periods, respectively. More than 17,000 clinicians have now prescribed SUNOSI since launch. We continue to maintain broad payer coverage of approximately 82% of lives covered across all channels.