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00:07 Good morning, and welcome to today’s Axsome Fourth Quarter and Full-Year 2021 Financial Results. My name is and I will be your moderator for today’s call. 00:33 I would now like to pass the conference call over to our host Mark Jacobson, Chief Operating Officer. Mark, please..
00:46 Thank you, operator. Good morning, and thank you all for joining us on today's conference call. Our earnings press release, providing a corporate update and details on the company's financial results for the fourth quarter and full-year of 2021 crossed the wire a short time ago and is available on our website at axsome.com.
01:06 During today's call, we will be making certain forward-looking statements.
These statements may include statements regarding, among other things, the efficacy, safety and intended utilization of our investinational agents; our clinical and non-clinical plans; our plans to present or report additional data; the anticipated conduct and the source of future clinical trials; regulatory plans; future research and development plans; commercial plans and possible intended use of cash and investments.
01:37 These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements.
01:53 These and other risks are described in our periodic filings made with the Securities and Exchange Commission, including our quarterly and annual reports. You are cautioned not to place undue reliance on these forward-looking statements, which are only made as of today's date, and the company disclaims any obligation to update such statements.
02:12 Joining me on the call today are Dr. Herriot Tabuteau, Chief Executive Officer; Nick Pizzie, Chief Financial Officer; Lori Englebert, Senior Vice President of Commercial and Business Development; and Dr. Amanda Jones, Senior Vice President of Clinical Development.
02:28 Herriot will first provide an overview of the company and then review recent developments and upcoming milestones. Following Herriot, Lori will provide a commercial update, and then Nick will review our financial results. We will then open the line for questions. Questions will be taken in the order they are received.
02:46 And with that, I will turn the call over to Harriot..
02:51 Thank you, Mark. Good morning, everyone and thank you all for joining Axsome Therapeutics' fourth quarter and year-end 2021 financial results and business update conference call.
2021 was the year of continued progress which has put us in a position to potentially launch two new investigational medicines for patients living with depression and migraine. 03:14 I will provide an update on our development pipeline before turning it to Lori, who will provide a commercial update.
Starting with our first lead product candidate AXS-05, which is undergoing an NDA review for the treatment of major depressive disorder. The FDA previously informed us of two deficiencies related to analytical methods in the Chemistry, Manufacturing, and Controls section of the NDA. 03:41 We submitted a response addressing these deficiencies.
The FDA has acknowledged receipt of the response and to date, we have not been made aware of any other deficiencies related to the NDA by the FDA. AXS-05 is also being developed for the treatment of Alzheimer’s Disease Agitation. Enrollment in the Phase 3 ACCORD trial for this indication is progressing.
04:09 Currently, blinded relapse events are below projections. This may imply a potentially greater than projected overall durability of affect in the study, which would have implications for the duration of the trial.
In light of these observations, we are evaluating the design of the study and will provide an update following consultation with the FDA. With regards to the development of AXS-05 in smoking cessation, we intend to provide timing on initiation of that trial in the coming months.
04:43 Moving on to our second lead product candidate, AXS-07, a multi-mechanistic acute treatment for migraine. The NDA for AXS-07 was accepted for review by the FDA with a PDUFA target action date of April 30, 2022.
The FDA previously notified us that due to COVID-related travel restrictions, they might be unable to complete a required inspection of a contract manufacturing facility prior to the PDUFA date. 05:13 We have since been informed by the FDA that it does not anticipate any issues with completing the facility inspection prior to PDUFA.
With the NDAs for AXS-05 and AXS-07 under active review, Axsome launched preparations are underway. And Lori will provide details on our commercial launch readiness. 05:36 The rest of our rich pipeline continues to advance.
For AXS-12, our product candidate being developed for the treatment of narcolepsy, enrollment in the SYMPHONY Phase III trial is progressing and top-line results are anticipated in the first half of 2023.
05:54 For AXS-14, our product candidate for the treatment of fibromyalgia, manufacturing and other activities related to the planned submission of an NDA are ongoing, and we expect to submit the NDA for this product candidate in 2023. 06:11 I will now turn the call over to Lori, who will provide a commercial update..
06:17 Thank you, Herriot, and good morning, everyone. 2021 was a year of intense commercial preparation, and I'd like to take a moment to express my sincere appreciation to the team for their continued passion, commitment, and excitement associated with potentially bringing two new therapies to patients.
I am extremely proud of the launch preparation efforts achieved over the past year. 06:41 The opportunity to provide new therapeutic options for patients affected by depression remains substantial. Recently, the Lancet published an article by the Lancet World Psychiatric Association Commission, deeming depression, a global health crisis.
06:59 The and powerful article calls for immediate and united action to reduce the global burden of depression, stating that the world is failing to tackle deeper sustain and increasingly serious global crisis of depression.
That article is one of many data points, demonstrating an undeniable urgent need to help address this burden and bring support to those affected by the disease. 07:24 Our approach to commercialization for AXS-05 is innovative and purposeful, and we are prepared to execute if approved.
Field leadership remains excited and have fully recruited the field force. All of whom are ready to join Axsome immediately upon approval. 07:41 The market access team continues to engage in permitted payer discussions, in sharing awareness of Axsome, and the product profile.
Distribution and patient support services are ready to turn on at launch and marketing materials are ready to be deployed, pending adjustments for final label.
08:00 If approved, AXS-05 would be an important new treatment option for the many Americans living with depression, and we are prepared and ready to bring this meaningful innovation to patients. 08:13 I will now shift gears to address launch preparations for AXS-07 for the acute treatment of migraine.
Despite recent innovation, there continues to be close to 70% dissatisfaction rate with currently available therapies, demonstrating high unmet need for the 37 million Americans who experience migraine. 08:31 Given the current migraine landscape, our commercialization strategy for the acute migraine market will be strategic and highly targeted.
In terms of preparation, marketing efforts and launch planning are well underway and tracking accordingly. 08:46 Permitted payer discussions have commenced and sales force recruiting is underway. Consistent with the AXS-05 sales rep offers, all offers for the AXS-07 salesforce will be made contingent upon approval.
We are excited about the opportunity to potentially bring to market another option for the any Americans suffering from migraine. 09:10 Lastly, our Digital Centric Commercialization or DCC platform remains fundamental to the commercialization strategy.
The DCC platform is a technology enabled platform, designed to use streamlined systems and digital enablement tools, combined with sophisticated data and analytics to allow for a more effective, efficient, and meaningful engagement with physicians and patients. 09:35 The platform is fully implemented, tested, and ready for execution.
Our commercial launch strategy is innovative and purposeful with the intent to bring important new products to market in a meaningful way. 09:49 The differentiated clinical profiles for both AXS-05 and AXS-07 have the potential to bring significant benefit to patients and physicians who treatment them.
We remain excited about the opportunity to potentially bring these important new products to market. 10:05 I will now turn it over to Nick who will review our financials..
10:09 Thank you, Lori, and good morning, everyone. Today, I will discuss our fourth quarter and full-year 2021 results and provide some financial guidance. We ended the year with approximately $87 million in cash, compared to roughly $115 million at the end of the third quarter, a net decrease of approximately $28 million.
10:27 Inclusive of utilization of our ATM facility in Q1 2022, our proforma cash balance as of year-end is approximately $106 million. R&D expenses were $13.8 million for the quarter ending December 31, 2021 versus $17.4 million for the comparable period in 2020.
The decrease was due to the conclusion of several clinical trials, which were ongoing in the comparable prior period. 10:55 For the year, R&D expenses were $58.1 million, compared to $70.2 million for fiscal year 2020. R&D expense during 2020 included a one-time charge of $10.2 million related to the Pfizer license agreement.
11:12 G&A expenses were $18.8 million for the quarter ending December 31, 2021 and $10.4 million for the comparable period in 2020. The increase was primarily related to pre-commercial activities at personnel expense along with an increase in non-cash stock compensation expense.
11:32 For the year, G&A expenses were $66.6 million, compared to $28.9 million for the comparable period in 2020. The increase was primarily due to the build-out of the commercial function along with an increase in stock compensation expense.
11:48 Net loss was $34 million or $0.90 per share for the three months ended December 31, 2021, compared to a net loss of $29.2 million or $0.78 per share for the comparable period in 2020. 12:02 Net loss for the year was $130.4 million or $3.47 compared to a net loss of $102.9 million or $2.07 per share for fiscal year 2020.
As a reminder, in Q4 of 2021, we expanded our term loan facility with Hercules Capital to $300 million with up to $120 million available upon FDA approval of AXS-05 in MDD and AXS-07 in migraine and access to an additional $130 million thereafter.
This committed non-dilutive capital gives us additional financial flexibility through both anticipated potential commercial launches for AXS-05 and AXS-07.
12:51 We believe our year-end proforma cash position of $106 million along with the remaining committed capital from our $300 million term loan facility, is sufficient to fund anticipated operations, based on the current operating plan into 2024. 13:08 That concludes our fourth quarter and full-year 2021 financial review.
I will now turn the call back to Mark to lead the Q&A discussion..
13:17 Thank you, Nick. Operator, may we please our have our first question..
13:26 Thank you. Our first question comes from the line of Charles Duncan of Cantor Fitzgerald. Your line is now open. Please go ahead..
14:01 Hi. This is for Charles. Good morning and congratulations on all the progress.
First question is for 005, can you provide any color on the next steps with the FDA and anticipated timing? And has there been any other dialogue with the FDA relating anything about efficacy or safety or anything else?.
14:25 Great. Thank you for the question. So, I'll turn it to Mark to talk about the regulatory communications and interactions with the FDA..
14:34 Good morning. So, the current snapshot is as you're aware, we were made of two deficiencies pertaining to CMC in particular analytical methods, a number of months ago. We subsequently responded to those efficiencies addressing them and FDA has confirmed receipt of those acknowledgement receipt and has told us they are reviewing our responses.
15:00 So that's still the current snapshot. We have not been made aware of any other deficiencies or anything like that. No discussion around efficacy, safety, or things like that. And as that proceeds, we'll continue to keep you updated.
In terms of how we're thinking about timing, we don't have any guidance for you or specific feedback that we’ve received. So, what we're doing for planning purposes is, we're using kind of the major amendment framework to inform our planning processes.
And just as a reminder to that, during the course of a normal review, if there is a major amendment submitted that FDA accepts to review that typically expends the PDUFA clock by three months, in total. 15:48 And so, again that's our guidance.
We haven't been told by FDA that that's the process or procedures they're using, but that's what we're using just for planning purposes. So, solely that’s helpful..
16:01 Yeah. Thank you.
And for 05 in Alzheimer's agitation, can you give us a sense of how enrollment is going and has there been any impact by COVID?.
16:14 Sure. Thanks for the question. Enrollment is proceeding well and it puts us on track to meet our guidance of the first half of 2023 in terms of reporting results.
We did discuss in the release this morning that the target number of events, which determines actually when we would be able to stop the study that is – it's a good thing that those events are lower than our projections because it implies potentially greater than expected durability of effect, but it does make us want to look at the design of the trial and also take advantage of the fact that we have Breakthrough Therapy designations with the FDA for the syndication and consult with them.
17:11 We're very excited that this is pioneering work, which we are conducting and this is the first time that this study design has been used in this syndication in Alzheimer's disease agitation with AXS-05. And so, we want to make sure that we're looking at the study very carefully..
17:32 Alright.
And switching gears and last question for 07, given the treatment landscape for migraine with oral CGRP drugs and taking share from the as well as the CGRP monoclonals can you help us understand the residual unmet need and product positioning?.
17:56 Yeah, Hi. I’m happy to take that. Thanks for the question. So, the migraine landscape continues to have a high unmet need. Recently, as recently as a year ago, Champ, a well-known patient advocacy organization performed a very extensive survey, which shows that 70% of patients are still dissatisfied with the current therapies available.
18:18 And to give you a further data point that I think was fairly – pointing and driving that point home is that that survey revealed that 55% of migraine patients have cycled through at least 10 different therapies.
It's a point that that isn't lost on me that cycling through that many therapies needs that there's for sure a continued high level dissatisfaction. 18:43 And again, that was as recently as a year ago. And I also just want, Nick mentioned that triptan’s are still 85% of the market share, out in the current treatment landscape.
We do think that given our clinical profile, there's a great potential for the product..
19:04 Alright. Thank you for taking our questions..
19:10 Thank you. Our next question comes from Joon Lee of Truist Securities..
19:18 Hey, guys. Thanks for taking our questions and thanks for the updates.
So, just to summarize your response to the prior question, you're working assumption based on what you call a major amendment framework is a three month extension under PDUFA, is that correct? And can you share any references supporting that assumption?.
19:39 Hey, Joon, it's Mark. So, don't take that as written in stone, we're just using that for something to allow us to run the business and for planning purposes.
And why do we think about it like that? Because again during the course of a normal review, if you have a substantive addition amendment or additional data analysis, etcetera that FDA accepts to review, right, if they accept to review it that's a major amendment.
And then depending on what you submit, the clock can be extended by, say, 2 months to 3 months depending on the nature of the content.
20:17 So, if you go on to the FDA's website and check out their guidance, the desk reference manual things like that, it gives you categories of what triggered say a 2-month or a 3-month and we’re just assuming for planning purposes, given the timeline extension at play given that there's no PDUFA clock, we're assuming that that 3-months is, why the 3-months because that's typically the time that FDA has determined, they need in order to review additional data.
20:47 So, it's similar here, but we're just off the clock. And so, that's the thinking of it. And is it going to be 3-months and we don't know. We haven't – again, we haven't received that specific feedback that they're going to take action in 3-months from our submission.
That's not what it is, but we think it's in absence of any direct commentary like that, that's what we're using because that's information that FDA has provided publicly in terms of the normal course of a review. 21:17 So, no other references for you besides standard FDA processes and procedures..
21:25 Understood That's fair. And thank you so much. That's helpful. And then one more question. Regards to your ACCORD study in Alzheimer's agitation, you're seeing a lower event of relapse than you projected. And then you're implying that that could be due to drugs having a greater than anticipated effect.
And then you're looking to have a dialogue with FDA for potential trial amendments, what kind of amendment did you have in mind? Is this an interim look and an interim analysis so that for possibility of a superiority at , we love to hear your elaboration on what you hope to accomplish with that meeting with the FDA on.