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

Access earnings results, analyst expectations, report, slides, earnings call, and transcript.

Overview

The earnings call summary indicates strong progress in product development, with multiple Phase III trials and regulatory submissions on track. The Q&A section highlights positive growth trends and strategic plans, although some details were withheld. The market cap suggests a moderate reaction. Considering the strategic plans, strong product pipeline, and positive indications from the Q&A, a positive stock price movement of 2% to 8% is expected over the next two weeks.

Key Financial Performance

Total Revenue $171 million, representing a 63% increase year-over-year. The increase is attributed to strong performance across the 3 marketed products: AUVELITY, SUNOSI, and SYMBRAVO.

AUVELITY Net Product Sales $136.1 million, up 69% versus last year. Growth driven by strong prescription growth, increased new writer activation, and strategic commercial investments.

SUNOSI Net Product Revenues $32.8 million, up 35% versus the prior year. Includes $31.6 million in net product sales and $1.2 million in royalty revenue. Growth attributed to durable performance and expanding adoption.

SYMBRAVO Net Sales $2.1 million in its first full quarter on the market. Early progress attributed to focused sales and marketing activity among headache specialists.

Total Cost of Revenue $11.9 million compared to $8.4 million for the third quarter of 2024. Increase due to higher product sales.

Research and Development Expenses $40.2 million, decreased 11% compared to last year. Decrease primarily driven by the completion of clinical trials for solriamfetol in ADHD and MDD.

Selling, General and Administrative Expenses $150.2 million, increased 57% compared to last year. Increase driven by commercialization activities for AUVELITY, including sales force expansion and direct-to-consumer advertising, as well as the commercial launch of SYMBRAVO.

Net Loss $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. Improvement due to increased revenue and operational efficiencies.

Cash and Cash Equivalents $325.3 million at the end of the third quarter, compared to $315.4 million at the end of 2024. Increase attributed to strong revenue performance.

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Operating Highlights

AUVELITY: Continues to gain traction as a differentiated treatment for major depressive disorder with strong demand and tracking well against long-term expectations.

SUNOSI: Steady trajectory with year-to-date sequential growth nearly double that of the same period last year, showing durable performance and expanding adoption.

SYMBRAVO: Completed its first full quarter of commercial launch in Q3, with focus on broadening patient access and driving awareness with clinicians.

Alzheimer's disease agitation: Submitted supplemental NDA for AXS-05, targeting a substantial addressable market with high unmet need.

Narcolepsy: Targeting NDA submission for AXS-12 for cataplexy treatment in Q4, addressing critical gaps in current treatment.

ADHD: Planning Phase III trial for solriamfetol in children and adolescents in Q4, potentially expanding its market.

Revenue Growth: Total revenue of $171 million in Q3, a 63% increase year-over-year, driven by AUVELITY, SUNOSI, and SYMBRAVO.

Cash Position: Ended Q3 with $325.3 million in cash and cash equivalents, sufficient to fund operations into cash flow positivity.

Cost Management: R&D expenses decreased by 11% year-over-year, while SG&A expenses increased by 57% due to commercialization activities.

Pipeline Expansion: Advancing late-stage programs in psychiatry and neurology, including Alzheimer's disease agitation, narcolepsy, ADHD, binge eating disorder, and fibromyalgia.

Commercial Infrastructure: Scaling commercial platform for potential impactful launches of AXS-05 and AXS-12, leveraging existing sleep franchise for efficiency.

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Risk or Challenges

Regulatory Risks: The company is awaiting FDA decisions on multiple submissions, including the supplemental NDA for AXS-05 in Alzheimer's disease agitation and the NDA for AXS-12 for narcolepsy. Delays or rejections could impact product launches and revenue growth.

Market Access Challenges: Gross-to-net discounts for key products like AUVELITY and SUNOSI are expected to increase, potentially impacting profitability. SYMBRAVO's gross-to-net discount remains elevated during its launch phase, which could affect its financial performance.

Commercialization Risks: The company is heavily investing in commercialization activities, including sales force expansion and direct-to-consumer advertising. These high costs may not yield proportional revenue growth, especially for newly launched products like SYMBRAVO.

Pipeline Development Risks: The company is advancing multiple late-stage trials and new indications for existing products. Any delays, failures, or setbacks in these trials could hinder future growth and product diversification.

Competitive Pressures: The CNS market is highly competitive, with existing and new entrants potentially impacting the market share of Axsome's products like AUVELITY, SUNOSI, and SYMBRAVO.

Economic and Financial Risks: The company reported a net loss of $47.2 million for the quarter, and while it has sufficient cash reserves, prolonged losses could strain financial resources. Additionally, increasing operating expenses, particularly in SG&A, could impact long-term profitability.

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Guidance & Outlook

AUVELITY Growth: AUVELITY continues to gain traction as a differentiated treatment for major depressive disorder, with strong prescription growth and increased new writer activation. Approximately 209,000 prescriptions were written in Q3 2025, representing 46% year-over-year growth and 9% sequential growth. Commercial coverage increased to 85% of all lives across channels.

SYMBRAVO Launch: SYMBRAVO completed its first full quarter of commercial launch in Q3 2025, with over 5,000 prescriptions written and more than 3,300 new patients starting the treatment. Market access and coverage are expected to expand into 2026.

SUNOSI Performance: SUNOSI demonstrated steady growth with approximately 53,000 prescriptions in Q3 2025, representing 12% year-over-year and 5% sequential growth. Payer coverage remains at approximately 83% of lives covered across channels.

AXS-05 in Alzheimer's Disease Agitation: A supplemental NDA for AXS-05 in Alzheimer's disease agitation has been submitted, with the FDA's decision on acceptance of the filing anticipated. If approved, the company plans to scale its commercial platform for an impactful launch.

AXS-12 for Narcolepsy: The company targets the submission of an NDA for AXS-12 for the treatment of cataplexy in narcolepsy in Q4 2025. AXS-12 is expected to address critical gaps in current treatment and align strategically with the existing sleep franchise.

Solriamfetol in ADHD and Other Indications: A Phase III trial for solriamfetol in children and adolescents with ADHD is planned for Q4 2025. Additional Phase III trials for solriamfetol in MDD with excessive daytime sleepiness, binge eating disorder, and shift work disorder are ongoing, with results expected in 2026.

AXS-14 for Fibromyalgia: Preparations for a Phase III trial in fibromyalgia are being finalized, with the trial expected to launch before the end of 2025.

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Shareholder Return Plan

The selected topic was not discussed during the call.

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Key Q&A

Q:Can you talk about the increased depth of prescribing for SYMBRAVO and what you'd like to see before investing more in the launch?

A:The SYMBRAVO launch is still in its early stages, but the response from HCPs and patients has been positive. The company is focused on penetrating the top 150 headache centers and large neurology practices. Decisions on expansion or incremental investment will depend on observed impacts. Improvements in market access have been noted, and updates will be shared as the brand progresses.

Q:Do you see the primary care segment as a key growth driver for AUVELITY, and how do you envision growing this segment?

A:Yes, primary care is an important area for AUVELITY in MDD, as most patients present to primary care upon diagnosis. The segment now represents roughly 1/3 of the subscriber base, with strong performance in new patient starts and prescriptions. Growth will be driven by focused sales force efforts, expanded market access, and a direct-to-consumer campaign, which has shown early positive signals.

Q:What are your expectations for AXS-05 adoption if approved for Alzheimer's agitation, and how do you plan to drive uptake?

A:The company is optimistic about AXS-05's impact on the Alzheimer's agitation market. Focus areas include primary care, geriatric psychiatrists, neurologists, and long-term care settings. The existing sales force will be leveraged, with additional investment in long-term care promotion if approved. Learnings from REXULTI's promotion will be incorporated into the launch strategy.

Q:How much capacity does the existing sales force have, and when might you need to expand again?

A:The current sales force is driving growth in new prescribers and patients. Additional representatives are planned to support Alzheimer's agitation approval, with groundwork for future expansions underway. The exact number of additional representatives is still being determined, but expansion is expected early in 2026.

Q:Can you comment on the AD agitation application and any implications from the government shutdown?

A:The company has not disclosed the submission date but expects the FDA to notify sponsors within 74 days of submission. No potential impact from the government shutdown is anticipated, and the next update will be the potential acceptance decision.

Q:Can you discuss the study designs for SUNOSI's Phase III trials for binge eating and shift work disorder?

A:The binge eating disorder study is a standard parallel-group design, and a second trial will be initiated based on the results. For ADHD, a second study in pediatric patients is planned for the fourth quarter, following a positive Phase III trial in adults.

Q:What is your long-term strategic perspective on the portfolio?

A:The company has three marketed products with long periods of exclusivity and several late-stage assets. While there is no immediate need to add to the pipeline, the company is open to complementary additions and will make strategic decisions to enhance the pipeline.

Q:What are your thoughts on the commercial opportunity for reboxetine, given competition from oveporexton?

A:Reboxetine focuses on norepinephrine reuptake inhibition, addressing the pathophysiology of narcolepsy. The clinical profile shows great efficacy in cataplexy and favorable tolerability. Significant unmet need remains, even with new mechanistic approaches, creating opportunities for AXS-12. The product is highly synergistic with the current SUNOSI sales and marketing infrastructure.

Q:Where is the demand for SUNOSI coming from, and are there plans to combine it with AXS-12?

A:The predominant growth for SUNOSI is from the OSA segment, representing roughly 2/3 of overall prescribing. Narcolepsy is also an important component. The priority is to get AXS-12 approved, but there may be patients who receive both SUNOSI and AXS-12, given their complementary indications.

Q:How many centers do you expect to target in the next wave for SYMBRAVO, and what is the timing for the DTC campaign?

A:The next wave of SYMBRAVO expansion would target primary care markets with a heavy proportion of migraine treaters. The timing for a DTC campaign is premature to discuss but will depend on achieving a strong foundation of HCP prescribers, market access, and sales force size.

Q:What is the clinical profile bar necessary for priority review under breakthrough designation for AXS-05 in Alzheimer's agitation?

A:The base case is a standard review for the application. The FDA does not use a specific quantitative efficacy bar for priority review. The company will provide updates on the potential acceptance decision.

Q:Are you seeing per prescriber activity trending upward for AUVELITY and SUNOSI?

A:Growth is driven by increased productivity among existing writers and the addition of new writers. Both brands are benefiting from positive patient feedback and effective engagement by the sales team.

Q:What is the expected impact of the recently launched DTC campaign for AUVELITY on prescriptions?

A:The impact of the DTC campaign is expected to be observed within 8 to 12 weeks, with early signs of increased new patient starts. The company will continue to monitor and provide updates.

Q:Will the third GPO contract for AUVELITY have a similar favorable gross-to-net impact as the 28 million lives added in Q3?

A:It is too early to determine the gross-to-net impact of the third GPO contract, but the company is pleased with the improvement in gross-to-net and formulary access. Negotiations will continue to focus on maintaining long-term value and increasing patient coverage.

Q:What is the planned sales force expansion for Alzheimer's agitation, and is it included in the cash flow positivity guidance?

A:The sales force will expand if AXS-05 is approved, with the exact number of additional representatives still being determined. The expansion is already included in the cash flow positivity guidance.

Q:How many quarters will it take to see the impact of the DTC campaign for AUVELITY?

A:The impact of the DTC campaign is expected to be observed within 8 to 12 weeks, with early signs of increased new patient starts. The company will continue to monitor and provide updates.

Q:What is the cadence for the initiation of the four Phase III trials planned for this quarter?

A:The four Phase III trials will not all start on the same day but will have a natural cadence. The company is on track to initiate all studies in the fourth quarter.

Q:How do your regulatory interactions for AXS-05 in Alzheimer's agitation differ from past programs?

A:The regulatory interactions for AXS-05 in Alzheimer's agitation are proceeding as expected and are in the ordinary course of the submission cycle.

Q:What is driving the expanding epidemiology estimates for narcolepsy?

A:Increased awareness and interest in the space, along with more products being developed and coming to market, may be driving the expanding estimates. The company estimates around 185,000 people in the U.S. suffer from narcolepsy.

Q:Review of Unclear Management Responses

A:Management avoided providing a direct answer to the question about the timing of the DTC campaign for SYMBRAVO, stating it was premature to discuss. They also did not provide specific numbers for the planned sales force expansion for Alzheimer's agitation or the gross-to-net impact of the third GPO contract for AUVELITY. Additionally, they did not disclose the submission date for the AD agitation application or provide details on the potential AdCom for AXS-05.

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Earnings Word Cloud

The most frequently occurring keywords in this quarter's earning call

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The earnings call highlighted strong financial performance with a 62% YoY revenue growth and an improved net loss. Product pipeline initiatives and clinical programs show significant progress, with optimistic guidance for AXS-05 and expanding sales strategies. Despite some management avoidance on specifics, the overall sentiment is positive due to strategic expansions and anticipated NDA submissions. The market cap suggests moderate sensitivity, supporting a positive prediction.

AXSM Slides

Axsome Q1 2025 slides: 62% revenue growth as CNS portfolio expands

2025-05-05

Axsome Q2 2025 slides: revenue surges 72% YoY, pipeline advances on track

2025-08-04

Axsome Therapeutics Q3 2025 slides: Strong revenue growth amid pipeline expansion

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AXSM Report

Axsome Therapeutics, Inc. 10-K

10-K

2025-02-18

Axsome Therapeutics, Inc. 10-Q

10-Q

2024-11-12

Axsome Therapeutics, Inc. 10-Q

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Axsome Therapeutics, Inc. 10-Q

10-Q

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