Key Points
- Revenue in the quarter posted 87% year-over-year growth.
- Net loss was $79.3 million, or $1.67 per share.
- Strong sales of Auvelity and Sunosi drove the revenue performance.
Axsome Therapeutics (AXSM -1.60%), a biopharmaceutical company specializing in central nervous system disorders, released its Q2 2024 earnings on August 5, 2024. Significant news from the earnings release was the impressive revenue growth driven by its products Auvelity and Sunosi. The company reported total revenue of $87.2 million. Despite this revenue success, the company's net loss per share was -$1.67 to total $79.3 million. Overall, the quarter showcased strong commercial execution but was marred by rising expenses and operational losses.
| Metric | Result (Q2 2024) | Result (Q2 2023) | % Change (YoY) |
|---|---|---|---|
| Total Revenue | $87.2M | $46.7M | 87% |
| Net Loss per Share (Non-GAAP) | -$1.67 | -$1.03 | |
| Auvelity Sales | $65M | $27.6M | 135% |
| Sunosi Sales | $22.1M | $19.1M | 16% |
| Source: Analyst estimates for the quarter provided by FactSet. |
Overview of Axsome Therapeutics
Axsome Therapeutics, Inc. (AXSM -1.60%) is a biopharmaceutical company focused on developing and commercializing therapies for central nervous system (CNS) disorders. Its key products are Auvelity and Sunosi, both of which have shown strong market performance. Auvelity treats major depressive disorder (MDD) and has significantly grown its sales since its approval in August 2022. Sunosi, aimed at treating excessive daytime sleepiness (EDS), has also been a reliable revenue generator.
The company’s current focus is on expanding its commercial footprint and progressing its pipeline of CNS disorder treatments. Key success factors for Axsome include market acceptance of its products and progression of its clinical trials for new indications.
Quarterly Highlights
During Q2 2024, notable developments for Axsome included substantial revenue growth, driven primarily by strong sales of Auvelity and Sunosi. Auvelity's net product sales were $65 million, up 135% year-over-year. The number of prescriptions for Auvelity increased by 29% sequentially, reaching 123,000 in Q2 2024. This growth was further supported by increased commercial payer coverage, which now includes 60% of commercial lives covered and 76% of all channels, including government programs.
Sunosi contributed $22.1 million in net product revenue, reflecting a 16% year-over-year growth. Prescription numbers for Sunosi grew by 8% from Q1 2024, totaling approximately 45,000 in Q2 2024. Payer coverage for Sunosi remains robust, covering 95% of commercial lives and 83% of all channels.
However, the quarter also revealed some challenges. Axsome reported a net loss of $79.3 million for Q2 2024, compared to $67.2 million in Q2 2023. This was due to increased operating expenses, including a 142% rise in R&D expenses to $49.9 million and a 31% increase in selling, general, and administrative (SG&A) expenses to $103.6 million. These costs were mainly driven by commercialization efforts and personnel expansion.
Axsome continues to progress across multiple pipeline programs. The company has resubmitted the New Drug Application (NDA) for AXS-07 for migraine treatment and expects top-line results from various ongoing trials in the second half of 2024. Additionally, the company plans to submit an NDA for AXS-14 targeting fibromyalgia in Q3 2024.
The company’s regulatory and intellectual property strategies remain pivotal. Axsome’s resubmission of the AXS-07 NDA epitomizes its proactive regulatory approach. A recent settlement with Unichem Laboratories Ltd. secures market exclusivity for Sunosi until 2042.
Financially, Axsome ended Q2 2024 with $315.7 million in cash and cash equivalents, down from $386.2 million as of December 2023. Despite increased spending, Axsome believes its current cash reserves are sufficient to fund anticipated operations into cash flow positivity. The company’s financial strategy focuses on maintaining robust funding to support its R&D and commercialization activities.
Looking Ahead
Management has provided some insight into its financial outlook and future strategies. The expectation is to achieve significant milestones in its pipeline with multiple NDA submissions planned for 2024 and potential approvals in subsequent periods. Specific focus is given to the commercialization of Auvelity and Sunosi, with ongoing efforts to expand market reach and increase prescription numbers.
Investors should be mindful of Axsome’s financial health, particularly its ability to manage cash reserves effectively, given its unprofitable status and rising costs. Additionally, progression in its clinical trials for pipeline products remains crucial for the company’s future revenue streams and valuation.
