Q1 2024 Axsome Therapeutics Inc Earnings Call

Participants

Darren Opland; Director, Corporate Communications; Axsome Therapeutics Inc

Herriot Tabuteau; Chairman of the Board, President, Chief Executive Officer, Founder; Axsome Therapeutics Inc

Nick Pizzie; Chief Financial Officer; Axsome Therapeutics Inc

Ari Maizel; Executive Vice President, Head of Commercial; Axsome Therapeutics Inc

Charles Duncan; Analyst; Cantor Fitzgerald & Co.

Leonid Timashev; Analyst; RBC Capital Markets

Ash Verma; Analyst; UBS

Ram Selvaraju; Analyst; H.C. Wainwright & Co, LLC

Marc Goodman; Analyst; Leerink Partners

David Amsellem; Analyst; Piper Sandler & Co.

Yatin Suneja; Analyst; Guggenheim Securities, LLC

Jason Gerberry; Analyst; BofA Securities

Joon Lee; Analyst; Truist Securities, Inc.

Joel Beatty; Analyst; Robert W. Baird & Co.

David Holmes; Analyst; Citigroup

Vikram Purohit; Analyst; Morgan Stanley & Co LLC.

Matthew Kaplan; Analyst; Ladenburg Thalmann & Co. Inc.

Myles Minter; Analyst; William Blair & Company L.L.C.

Troy Langford; Analyst; TD Cowen

Presentation

Operator

Good morning and welcome to the Axsome Therapeutics conference call. (Operator Instructions) As a reminder, today's conference call is being recorded. I would now like to turn the conference over to your host, Darren Opland, Director of Corporate Communications at Axsome Therapeutics.
Please go ahead.

Darren Opland

Good morning, and thank you all for joining us on today's conference call this morning, we issued our earnings press release, providing a corporate update and details of the Company's financial results for the first quarter of 2024.
The release crossed the wire a short time ago and is available on our website at axsome.com.
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 investigational agents, our clinical and nonclinical 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, our commercial plans regarding Sunosi ability and our other pipeline products, revenue projections and possible intended use of cash and investments 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. 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.
Joining me on the call today are Dr. Herriot Tabuteau, Chief Executive Officer; Nick Pizzie, Chief Financial Officer; Mark Jacobson, Chief Operating Officer; and Ari Maizel, Executive Vice President and Head of Commercial area, will provide an overview of the Company and progress made in the first quarter of 2024, as well as key upcoming milestones.
Following Aereo, Nick will review our financial results. Then Arnie will provide a commercial update.
We will then open the line for questions.
Questions will be taken in the order they are received.
And with that, I will turn the call over to Herriot.

Herriot Tabuteau

Thank you, Dan, and good morning, everyone, and thank you for joining Axsome Therapeutics First Quarter 2024 financial results and business update conference call. First quarter of 2024 was marked by strong financial performance for our own market products, which are delivering important and differentiated treatment options for patients living with depression, narcolepsy and obstructive sleep apnea.
Total net product revenue in the quarter was $75 million, representing year-over-year growth of approximately 160%. We will share additional details on our financial and commercial performance later in the call. We also significantly advanced our innovative neuroscience pipeline in the quarter, including announcing positive top line results for AXS-12 in narcolepsy, advancing AFSO. seven and AXS-14 towards NDA submissions, initiating pivotal trials in new indications with solriamfetol and advancing and expanding our Alzheimer's disease agitation program for excess oh five. We expect to continue the commercial and pipeline momentum in the balance of 2024.
I will now provide a brief update on our industry-leading neuroscience pipeline and expected milestones, starting with our two new stage Fox Title seven for the acute treatment of migraine is on track for an NDA resubmission this quarter. Additionally, we are conducting the EMERGE study, a multicenter Phase three single trial evaluating the efficacy and safety of FX of seven in adults with a prior inadequate response from oral CGRP inhibitor. We anticipate top line results from this trial in the second half of 2024 for AXS-14 which we are developing for the treatment of fibromyalgia. Pre-submission activities for the NDA for this product are nearing completion and continue to target submission later this quarter.
In March, we announced that the Phase 3 simply trial of AXS-12 in narcolepsy achieved this primary endpoint and significantly reduced the frequency of cataplexy attacks as compared to placebo at 12 also reduced excessive daytime sleepiness severity, improved cognition and reduced overall narcolepsy severity in open label safety extension trial for access 12 is ongoing with results expected in the fourth quarter of 2024. We are excited about the potential of the interest well to provide a differentiated treatment option for patients and HCPs for this debilitating condition.
Moving on to a successful five, we continue to anticipate completion of the Phase three ADVANCE trial in the treatment of Alzheimer's disease agitation in the second half of 2024.
Today, we announced that we launched the ACCORD two study, a double-blind, placebo-controlled, randomized withdrawal trial to evaluate the efficacy and safety of AXS-05 in the treatment of Alzheimer's disease. Agitation study is similar in design to the completed positive ACCORD one trial. We are core to the clinical development program, which now includes four controlled efficacy trials. Importantly, a court to further increases the robustness of our clinical program nor language disease agitation without impacting our overall development time line. Enrollment of Cohort two is very far along, and we expect enrollment completion around midyear. With respect to solriamfetol, our dopamine and norepinephrine reuptake inhibitor and Colony agonist, in addition to continued commercial performance from large, the Phase three PARADIGM trial in major depressive disorder in the Phase three in each trial in incidence order in the first quarter results from both trials are expected in 2025. We are on track to initiate a Phase three clinical program in shift work disorder this quarter. Solriamfetol is also being evaluated in the focused Phase three trial in ADHD for which we continue to anticipate top line result in the second half of this year.
Overall, our innovative neuroscience portfolio encompasses five of late-stage patent-protected product candidates, targeting 10 serious psychiatric and neurologic conditions with substantial market opportunities. Each product candidate has the potential to transform the treatment landscape for serious and difficult-to-treat CNS disorders, which affects more than 150 million people in the US.
I will now turn the call to Nick, who will provide details of our financial performance net banking area.

Nick Pizzie

Good morning. Today I'll discuss our first quarter results and provide some financial guidance. Total product revenues were $75 million for the first quarter of 2024. This consisted of net product sales of $74.1 million and royalty revenue of $900,000. Total product revenues for the comparable period in 2023 were $94.6 million, which consisted of net product sales of $28.6 million, royalty revenue of $300,000 and $65.7 million in one-time license revenue received from the out-licensing of Sunosi in certain ex-US territories.
Ability net product sales were $53.4 million for the first quarter of 2024, representing year-over-year growth of 240%. Ability net product sales for the comparable period were $15.7 million. Notably, net product revenue was $21.6 million for the first quarter of 2024 and consisted of $20.7 million in product sales and $900,000 in royalty revenue associated with Sunosi sales in our licensed territories.
Sunosi net product revenue for the comparable period in 2023 was $13.2 million, consisting of $12.9 million in product sales and $300,000 in royalty revenue. Total cost of revenue was $6.3 million for the first quarter of 2024. Total cost of revenue for the comparable period in '23 was $7.6 million, which included $5 million in Sunosi licensing transaction fee sharing expense.
Research and development expenses were $36.8 million for the first quarter of 2024 compared to $17.8 million for the comparable period in 2023. The increase was primarily related to the initiation of the sorry, Epocal PARADIGM trial for major depressive disorder, solriamfetol ENGAGE trial for the binge eating disorder, the advancement of the solriamfetol FOCUS trial for ADHD, the ongoing trials of AXO. five and XS. 12 manufacturing costs associated with the anticipated NDA for AXS-07 and AXS-14 post-marketing commitments for both ability and Sunosi and higher personnel costs, including noncash stock-based compensation, selling, general and administrative expenses were $99 million for the first quarter of 2024 compared to $74.2 million for the comparable period in 2023. The increase was primarily related to commercialization activities for ABILITY and Sunosi, including sales force and marketing expenses and higher personnel costs related to organizational growth, including noncash stock-based compensation.
Net loss for the first quarter of 2024 was $68.4 million or $1.44 per share compared to a net loss of $11.2 million or $0.26 per share for the comparable period in 2023. The net loss in the first quarter of 2024 increased $21 million in non-cash charges, of which the majority is comprised of non-cash stock-based compensation. The 2023 comparable period included approximately $62 million in net gain from the Sunosi out-licensing. Q1 typically has a negative seasonality effect on GTN, which we saw on both ability and Sunosi versus the prior quarter ability. Gtn discount for Q1 was in the low to mid 50s and Sunosi GTN discount was in the [mid 50s].
We ended the first quarter of 2024 with $331.4 million in cash and cash equivalents compared to $386.2 million as of year end. We believe that our current cash balance is sufficient to fund our anticipated operations into cash flow positivity. Based on the current operating plan, I would now like to turn the call over to Ari, we'll provide a commercial update.

Ari Maizel

Thank you, Mick. Axel delivered solid brand performance in the first quarter of 2024 of LED demand trends in Q1 once again outpaced growth rates for the market and branded competitors with approximately 95,000 prescriptions representing 12% quarter over quarter growth and 206% growth compared to the first quarter of 2023. Nearly 18,000 new patients started our ability in the quarter, bringing the total number of unique patients treated with our validations launch to more than 89,000.
Our sales team continues to activate new prescribers at a consistent rate with more than 36,000 first time ability prescribers in Q1, illustrating strong underlying demand for the product and expanded use among depression treaters in both psychiatry and primary care offices. We're especially proud of this performance in light of seasonal dynamics, which were compounded by the industry-wide change. Healthcare cyber attack payer coverage was stable in Q1 as our ability remains accessible to patients representing approximately 70% of covered lives as noted in our press release this morning, we just contracted with a large group purchasing organization for a potential formulary coverage of mobility, laying the groundwork for future increases in covered lives pharmacy benefit managers and health plans under this GPO are now able to make coverage decisions for our ability based on the contracted terms.
With this agreement, Axsome has now contracted with two of the three largest GPOs for potential coverage of our ability. We are very pleased with the strong commercial foundation we have created to support our ability performance, including our expanded psychiatry sales team, a recently enhanced sales and marketing campaign and expansion of digital capabilities to maximize reach to targeted HCPs. Of note, we observed an inflection in weekly new patient starts or NBRx in March, a positive signal about the impact of our Optimiz commercial footprint and continued adoption of mobility as a go-to treatment option for adults with major depressive disorder.
Transitioning now to Sunosi, total prescriptions were just over 41,000, representing a 1.6% decline versus Q4 2023 and 14% growth versus Q1 2023 demand in the first quarter was impacted by typical seasonality in the EDS market, as evidenced by the 3% decline observed in the wake-promoting agent market this quarter, approximately 3,700 new patients started Sunosi treatment during the quarter, bringing the total number of unique patients treated with Sunosi to approximately 68,000 since launch more than 400 new writers were activated in Q1, resulting in a total cumulative prescriber base of more than 12,600 since launch. Payer coverage for Sunosi in Q1 remained 83% of lives covered across channels.
In closing, Q1 was a very positive start to 2024 for both our ability and Sunosi with leading indicators such as trends with new patient starts and newly activated prescribers, reinforcing our confidence that Axon will deliver strong commercial performance in our 2nd year as a commercial company, we continue to receive compelling feedback from healthcare professionals and patients about the positive impact our products are having in real-world settings, and we are proud of Maxim's growing reputation as a leader in the CNS space that delivers differentiated and impactful products for serious psychiatric and neurological conditions.
I will now turn the call back to Darrin for Q&A.
Thank you very much.
Operator, may we please have our first question?

Question and Answer Session

Operator

(Operator Instructions) Charles Duncan, Cantor Fitzgerald.

Charles Duncan

Hey, good morning, Aereo and team. Congrats on a great quarter and I appreciate you taking our questions. I had a commercial question and then one on the pipeline regarding the commercial question. I'm not sure if I heard it, Ari was speaking fast. Can you give us a sense of new to brand versus a refill rates for mobility?Thanks.

Herriot Tabuteau

Yes, thanks, Charles. On new-to-brand at the moment, accounts for roughly 25% to 30% of weekly prescriptions. That's a healthy number. At the moment. We expect new-to-brand in to grow, but TRx obviously should outpace just based on the existing patient base and the refill rates, which at this point, we feel very comfortable with. We're seeing good experience and persistency generally and so hopefully that answers the question. Let me know if there are any specific follow-ups and just a little more color around persistency. I know it's probably too early, but how do you feel about that so far with mobility?
Yes, I feel really good. And in fact, we recently were engaged with a group of KOLs to receive feedback. And this is anecdotal we don't have specific claims data to prove this out, but they're they're seeing adherence is roughly twice what they have seen historically with SSRIs, which bodes very well for the brand I'm just showing that that the impact of the clinical profile is meaningful for patients, and they're sticking with it longer than other other antidepressants from the past.

Charles Duncan

Okay. And then in terms of development perhaps for you Aereo, can you provide us any information on the percent responder rate that you anticipate out of the first part of the ACCORD two study and then a sense of how you feel brexpiprazole has changed the unmet need, which anticipated access oh five to become frontline? Or would it I guess would it sequence after bricks brick papers all use in those in those patients.

Herriot Tabuteau

Thanks for the question. With regards to the responder rate in according to, I don't want to misspeak in terms of the exact responder rate, but it is exactly what you have modeled or wouldn't be included in clinical criteria in cohort one. So the studies are very similarly designed and done. And a reminder, the ACCORD trial was able to very effectively detect a signal in terms of brexpiprazole in unmet need. We don't view that Brexit. Brazil has changed for a safe and effective long-term treatment for Alzheimer's disease agitation. So the reminder, patients were being treated off-label are necessarily with typical anti-psychotics brexpiprazole guys fall into that class. And so we dealt with you. We don't view the opportunity, for example, is changing materially based upon that approval.
And then in terms of your frontline music, assuming that you continue to generate cash, that replicates what we saw in advance one. And also in Q1, we would fully expect that if it's oh five could be a front-line treatment and would be a front-line treatment for diverse disease agitation.

Charles Duncan

Makes sense Thanks for taking my questions.

Operator

(Operator Instructions) [Leonid Timashev], RBC Capital Markets.

Leonid Timashev

Hey, guys, congrats on a quarter to quarter, and thanks for taking my question on, can you just talk volume impact you'd expect from this latest GPO.? And should we expect some acceleration in scripts with an impact to gross to net in the near term? Or would it be more incremental gradual change? And then maybe just related to that and with two out of the three major GPOs in hand, can you talk about maybe the progress? Thank you.

Ari Maizel

Yes. Thanks, Celine and Desiree. So regarding price volume trade-off, it's a little premature to talk about impacton gross-to-net for this particular agreement. And obviously, part of the effort right now is to ensure that we're effectively pulling through the contract terms with the PBMs that are underneath the GPO umbrella. And but we do expect there to be volume growth once we are able to expand coverage, and we'll provide updates on the impact of the gross-to-net and when appropriate.
And regarding your question around the third GPO, what I'd say is, yes, we're having very fruitful discussions with all of the major payers and PBMs, including the GPOs. And these are complicated negotiations. Obviously, it's important for us not only to expand coverage, but also be mindful of profitability over the long term and because we have a growing portfolio that we need to plan for. So no specifics on the details of the negotiation, but we feel very good about the nature of the dialogue and look forward to future updates.

Operator

(Operator Instructions) Ash Verma, UBS.

Ash Verma

I think so thanks for taking my questions and congrats on the progress. So I had two. One was just just on this last comment that you had about the GPO win. Can you maybe elaborate like what percentage commercial lives are covered through the GPO? You have 48% coverage of prior to this?
I believe and then second, regarding this new study for AD agitation, can you remind us they go home they go? Is that something that you need for further regulatory package? Or do you think that the advance two study would be sufficient. Like why why do this study are now versus you already have a study going on and you had a successful randomized withdrawal study earlier. So just wanted to get your thoughts on that.
Thanks.

Herriot Tabuteau

So thanks for the question. So I'll listen two questions there. I'll take the last one and then I'll turn it over to Lori to answer the first question, so well, with regards to the ACCORD trial, no, we do not need it for a regulatory submission. This is an opportunity for us to increase the robustness of the program while also not affecting at all the timing of an NDA submission. So it just makes sense. We want to have the most robust package the strongest package going into an NDA review. And this is such an important indication. It's always helpful to generate additional data which may also vote for which we ourselves not just in terms of a regulatory submission, but also in terms of future publications be useful from a commercial perspective. So one field, we think it's the right thing to do. It's very efficient and allowed us to leverage the large number of patients who are experiencing stable responses to the current open-label safety extension trial.

Ari Maizel

Yet I didn't ask this is Ari. Your question around percent of lives with new GPO. And obviously, as you know, the GPOs represent a pool of PBMs and so on because we think each of the PBMs is a different number of lives covered and has the ability to make their own coverage decisions on. I can't give you a specific number of the incremental percentage of lives covered, but it is meaningfully above the 48% that we have publicly stated today. And so part of our focus on moving forward is to ensure that the majority of the PBMs underneath those GPOs, we are accessing the rates that we've agreed to. So it is a meaningful percentage increase if we were successful with all of the PBMs underneath the umbrella.

Operator

(Operator Instructions) Ram Selvaraju, H.C. Wainwright.

Ram Selvaraju

Thanks so much for taking my questions. Just very quickly on the commercial front, I was wondering if there are specific factors that you expect to impact discussions with the third of the three largest GPOs that you are currently looking to secure contracting for mobility with and if so, what those factors might be.
And then on the development side, I was wondering, Aereo, maybe if you could comment on the profile of AXS-12 relative to the existing approved marketed agents and whether you believe the impact on Cataplexy is likely to be the most significant selling point. And if you anticipate that the impact on sleepiness is going to be sufficient for AXS-12 to be positioned commercially in a competitive way in this indication?

Herriot Tabuteau

Well, I'll start with the first question. So the factors that impact negotiations, generally speaking are the demand growth that we're driving in the marketplace. And in fact, all of the on recent access discussions, we've had really focus on how quickly the brand is growing. And so the best way to secure access is to show volume growth in the absence of formal coverage. I think it's important to note that as a rule and while we negotiate for coverage with major plans of PBMs. One of the areas of focus has been to optimize our patient savings and reimbursement support services to support continued demand growth within the existing access paradigm and our ability to drive growth is the primary factor in driving interest with the GPOs and major plans and PBMs.
And so we're really proud of the growth that we've seen to start off the year. And we've I mentioned in my opening comments that we've seen about a 30% increase in weekly new patient starts our March compared to December, and that's with the existing access we have. So that only strengthens our ability to negotiate and ultimately have meaningful discussions with the insurance companies.
Have you started on doing DTC promotion availability? And if so, to what extent will we have DTC. largely in the digital space at the moment, we do not currently have a TV or video ad that's running, but that is something that is undertaken Federation at the moment, and we'll share updates when appropriate.

Ram Selvaraju

Great.

Ari Maizel

Thanks so much. Ron, when with that with regards to your question on asset quality and the profile so what we saw in the FLINT trial accrues a replication of what we saw in the CONCERT study was a pre important to insignificant impact on cataplexy. So not only was there a large percent reduction in complexity. But if you looked at in our remission of cataplexy, which is total elimination and the results were very stark. So a third of the patients had 100% reduction in cataplexy attacks versus less than 10% of patients in the placebo group. And we also want did see an impact on excessive daytime sleepiness severity as well as cognition. So we like the profile and the profile as it relates to and agents that are currently on the market is incredibly favorable.
We do know that of the US that are on the market, not all patients. In fact, the minority of patients actually tolerate them. So there is a significant unmet need. We did conducted a also a very large patient survey of 81 patients in conjunction with Narcolepsy Network. And what that showed was that even on current treatments, 77% of patients continue to experience cataplexy as it relates to your question around whether around yes, the data that you've generated that would be enough for clinicians and patients to think about without pain of a product what we saw in this study were a clear impact on excessive daytime sleepiness. And we also saw a clear impact from an overall narcolepsy severity.
So access 12 reduced activity and severity also improved overall narcolepsy severity as well as quality of life. So the way that we think about it is that should this product be made available to clinicians and to patients. That profile will be what is very apparent to us to patients and to clinicians when it's treated based on the patient reported outcomes as well as the clinician global impression of outcomes. So really like a profile, and we think this will be an important treatment for patients.

Ram Selvaraju

Thank you very much.

Operator

(Operator Instructions) Marc Goodman, Leerink.

Marc Goodman

Good morning. And Nick, can you talk about was there any inventory for mobility in the quarter? Anything unusual that that may have helped sales? And second, can you talk about gross to net from how you're thinking about the rest of the year and what these contracts that are now being put in place? How should we be thinking about over the next couple of years and an area.
Can you just talk about on AD agitation for second, obviously, last quarter you delay on by we're not exactly sure but into the second half, the completion of advance to maybe you can just give us a little more color there, like are we are we now back on track? Is this going to be something that's going to happen early second half of the year. Is this late in the second half of the year? And just to confirm that this new study that you're talking about here, this is just patients you've already gone through that open label. So it's not really competing against it at all right. Thanks.

Nick Pizzie

Hey Marc, Nick. So for inventory inventory remains in-channel at two weeks. So nothing has changed specifically around inventory for mobility doors. Noc remains continuing at two weeks. And then, you know, the GPN discount for Q1 was in the low to [mid 50s]. As you know, the GTN discount was in the [mid 50s] for the quarter. As you know, Q1 typically does have a seasonality. The negative seasonality effect on GTN, which we both saw an ability and Sunosi versus the prior quarter from formality. Gtn did fluctuate in Q1 and ended the quarter with March being in the [mid 50s].
And right now, we have no reason to expect it to vary significantly from that level moving forward.

Ari Maizel

And done mark as it relates to the question around Alzheimer's disease agitation So starting with firm with advance to the guidance side is second half of this year. We're very comfortable. We remain very comfortable with that guidance based on not a trend.
So far what we're seeing is very positive with regards to how that study is proceeding. And then as it relates to, of course, to is not competing with on advance, too. So you are correct. So you have a large number of potential sites or in the open-label portion, we're experiencing stable responses so that allow them very efficiently to help enroll a cohort two. And so we do expect that for enrollment in cohort two to complete in a complete mid year. And the reason for the confidence around that is that the study is very far along in terms of enrollment. And also just to understand for ADVANCE two enrollment really picked up over the past three months in that, why you're confident we're confident based on where enrollment the voice and it has been has only been advanced to be also very far along, and it continues to grow at a predictable pace.

Marc Goodman

Thanks.

Operator

(Operator Instructions) David Amsellem, Piper Sandler.

David Amsellem

I have a couple of questions on the pipeline. First, some for reboxetine in narcolepsy. Can you just remind us of the path forward? In other words, are you expecting to file after your you've completed the extension? Are there any other are there any other gating items to an NDA filing so can you talk about that and your timeline to filing on reboxetine in narcolepsy slash cataplexy? And then sorry, anti-tau, if you talk to your pediatric ADHD study plan, I believe that's a gating item to a filing and in ADHD. So it would be helpful to talk to that.
And then lastly, Astra, reboxetine and fibromyalgia, how big of a commercial priority is that and what's the extent to which you're going to need to expand the commercial organization, it does support that product commercially.
Thank you.

Herriot Tabuteau

But thank you for those questions. And so I'll take the first 212 and solriamfetol, and then I'll let Barry comment on the extra marketing. So in terms of on the timing for NDA filing for AXS-12. So the gating factor is completion of the open-label safety extension trial, which we expect to complete in second half of this year. And then on it will take us some time to put together the filing, but that is the gating factor. So once that is completed, we will then be able to file the NDA as it relates to solriamfetol in the pediatric ADHD study plan, you are correct that that is a trial which needs to be part of the initial NDA package and done. We've been working on that as you can imagine in terms of time speaking with the FDA to get that in place and we've not yet provided precise guidance, but in the study that we would be targeting to start this year.
And with regards to lung as regards TCI.,

Ari Maizel

Thanks for the question. I think for AXS-14 in fibromyalgia, we do view this as a meaningful commercial opportunity there are three approved agents, but there's a lot of room for improvement in terms of overall clinical profile for patients. And we feel very optimistic about the profile AXS-14 offers for patients as it relates to how it will impact the sort of commercial footprint. Part of what we're analyzing this year is how to effectively size and structure our sales force to accommodate a growing portfolio of products. And although fibromyalgia and it's not a psychiatric product, there is a lot of overlapping comorbidity with major depressive disorder that will influence some of our thinking. And so it's a little too early to say, you know how many additional reps we would want to build into the plan or how we would structure it. But we do think that there is a way to promote AXS-14 efficiently while also putting plenty of attention on the other approved products on the market.

David Amsellem

That's helpful. Thank you.

Operator

(Operator Instructions) Yatin Suneja, Guggenheim Securities.

Yatin Suneja

Hey, guys, thank you for taking my question. I have two quick ones. One is a clarification one with regard to the ACCORD two study. So that's a new study. And this is the four study within the ADA umbrella. Is that a requirement from the FDA that you have to do a randomized withdrawal study and then will the NDA package be contingent upon completion of that study or the outcome of that study. And so that's one.
And then with regard to reality. I mean very nice quarter. So congrats on that. Any any thoughts on thinking about providing some guidance for the product maybe on a quarterly or on a yearly basis? Thank you.

Herriot Tabuteau

Yes, sure.

Nick Pizzie

Hey, Alan, thanks for the question. Nick. It's just too early and actionability of lifecycle provide sales guidance, given the fluid nature of some of the market dynamics and the unpredictability of external factors that could have of different impacts. We have shared that we believe peak sales for ability in MDD alone are in the $1 billion to $3 billion range and Sunosi $300 million to $500 million for its current indications.

Herriot Tabuteau

The unknown with regards to our core to this is not an FDA requirement. However, it does increase the robustness of the package, and it is the pivotal trial. So we like that like heavy four different studies. So basically think about it, a advanced one in advanced two or two earlier studies and a core one and Core two or two randomized withdrawal study. So a very nice source of evidence generation with those four states.
And then with regards to one in the filing, it is contingent upon completion of that study. So that's not required is not really contingent on. However, we do think that based upon where we are with enrollment of our studies, as you'd expect, it's going to be fully enrolled them midyear and also timing of the relapses by the board one trial, which was positive that there is the potential for that study to we've got around year end, like my formal guidance. And sometimes it's based upon number of relapses and timing of relapses. But just to give you a sense of how one might think about it. So one, we're really happy with the way that we've been able to efficiently increase the robustness of the program for these very important products.

Operator

(Operator Instructions) Jason Gerberry, Bank of America.

Jason Gerberry

Hey, guys, thanks for taking my question, Tom. So just on a core two. So it sounds like the motivation with the study is that you kind of think about it as a marketing study arm and along those lines, is there an opportunity for you to pull a cord one into such that I don't know if the data has a better chance of getting into the label, given that Q1 was a really small trial. And then I know you guys did mention the cyber attack in 1Q. So I know some of your peers had kind of indicated it wasn't really a material impact number. So can you quantify to what extent the cyber attack did affect ability revenues in 1Q?
Thanks.

Herriot Tabuteau

So with regards to Akorn, too, just to be clear, and this is the it can be used for marketing, obviously, but it is a registration trial. So we like that. So it does provide a very objective source of evidence. And it relates to be able to put the fourth one on the two studies because there are some early design could definitely be combined, and that's typically something that is done and now in the new packages.

Ari Maizel

Yes. And regarding the Change Healthcare cyberattack and the impact for ability was really focused on two weeks at the end of February, beginning of March. And basically what we saw was, you know, roughly a 30% to 40% impact on weekly prescriptions for those couple of weeks. And during that time, we put in a number of technology optimizations and patient savings optimization. And we saw a very quick bounce back in early to mid-March for our demand trend. And it's been stable since then stable to growing since then. So it's largely behind us at this point and we don't expect any continue disruption. And for some brands, it was more impactful just related to time in market, whether patient savings cards were tied to the change.
Healthcare switch things of that nature. And so that's why it impacted us. But it was transient in nature and we feel really good about the solutions we put into place. And we've seen really nice growth centers.

Jason Gerberry

Thank you.

Operator

(Operator Instructions) Joon Lee, Truist Securities.

Joon Lee

But on that strong quarter, and thanks for taking our questions. We brought in a point to what was the rationale behind Amazon advantage and whether that might be talked about as opposed to a standard SoMo comparative trial, which I'm particularly proud of.
Yes, going to success and are the endpoints in our core two identical to that news and I quote one.
Thank you.

Herriot Tabuteau

So thanks to you know, you you were somewhat muffled. So I'm trying to answer the question the way that I interpreted it and not necessarily what you said. But I think the question was around important to and then what was the rationale for the design on versus other designs, so bad?
So the rationale was in wanting to take advantage already of?
Yes, practice. I mean, we had a study which was treating patients in an open-label fashion and therefore would allow assessment of stable response. So it made a lot of censoring since Feb and our open-label safety extension trial is essentially the same way that all randomized withdrawal study yet. So that was the rationale there in terms of the endpoint as compared to [41.8] identical. So this is that this is a way for us to be able to take the learnings from a core one and apply them to a Cohort two to generate additional data.

Joon Lee

Thank you.

Operator

(Operator Instructions) Joel Beatty, Baird.

Joel Beatty

If you're taking the questions, the first one is on ability to provide a breakdown between uses an earlier line and later line therapy with the second large Per-Se contract, it uses an earlier line therapy impacted it.
Yes, hey, this is Ari. Thanks for the question. We have seen a really nice increase since last quarter in line of therapy. And the increases we saw roughly 5% increase in first or second line use. So at this point, we're around 50% of mobility prescriptions are first or second line, which is a very a healthy trend. And we expect that to continue.
On your question around the GPO contract and the impact of line of therapy. Generally speaking, when we negotiate with plans and PBMs, we are negotiating for first or second line access for patients. And so we would expect to have or if we're successful in pulling through that comp those contract terms, that would further increase the earlier usage of our ability in patients.
Thanks. And last question, you have clean Friday kind of contacts and how this funding trajectory is looking going forward?
I'm sorry, you were hard to hear. Do you mind repeating the question, but how does this fund funding trajectory? Look going forward, just spending overall for R&D and SG&A?

Nick Pizzie

I'm sorry, I've got to think back to your question. So as our R&D expense for the quarter was $37 million which ticked up slightly from the previous quarter. We expect R&D spend to continue to increase gradually as we as the two about solriamfetol Phase three trials commence during the quarter with the third starting in Q2 and ship for these will be partially offset by the completion of the Symphony trial for AXS-12. And as a reminder, in Q2, we do plan to submit the NDA for fibromyalgia. So we will have a one-time charge for the NDA filing period.
As for SG&A, total expense for the quarter was $99 million. As I mentioned in my opening remarks that was higher than the previous quarter, but anticipated as it really related to the sales force expansion, we would anticipate SG&A expense to be in this range in future quarters.

Joel Beatty

Thank you.
Yes.

Operator

(Operator Instructions) David Holmes, Citi.

David Holmes

Hi, good morning and thanks for taking my question and congrats on the quarter. I wanted to ask about the impact of the GPO negotiations in terms of timing on any increases in the number commercial covered lives. Just I guess what could the cadence in covered lives that you pick up look like? And can we look towards next quarter as them potentially seeing a meaningful step-up in the number of covered lives?
Thanks.

Ari Maizel

Thanks for the question, David. So we expect coverage to increase, but it is difficult to predict the exact timing. The way to think about GPOs are effectively gatekeepers for PBMs, which is why the first step towards securing access is agreeing on contract terms, which include the rebates and utilization management parameters. So the agreement we announced today enables the PPPBN.'s under that umbrella to now access to the contract contracted rates for their members. And I can't provide a specific percentage increase in covered lives from the 48% we have today. But I will say that depending on how many of the PBMs underneath that umbrella access the rate, it is a meaningful increase over and above the 48% and the timing is just it's too difficult to provide.
And your question about next quarter. Obviously our intent is to try to improve it as quickly as possible, and we'll provide updates at the appropriate time.

Operator

(Operator Instructions) Graig Suvannavejh, Mizuho.

Why does is Avantec for, Greg and I just had a question about access oh five. Have you thought more about the branding for AXS-05 in AD agitation and if you keep it under the ability brand thinks And congrats on the quarter?

Herriot Tabuteau

Yes, thanks. Thanks for the questions. So you whenever you have a new indication, especially one which is different as it is in the case of FFO, five for hundreds of these expectations versus major depressive disorder. That is always a consideration and it's one that requires a lot of good thought and it's not just set on making just the answer on the fly. So this would require us to really think about it and got to do some quantitative work. So stay tuned and it's something that we would not obviously communicate or announce ahead of time whether it's something that we're working on are anything to add to that

Ari Maizel

No think you're spot on.
And I think the reality is that there are advantages and disadvantages to either maintaining the same name or having an alternative brand name. And we're going through the work right now in anticipation of a filing down the road.

Great.
Thank you.

Operator

(Operator Instructions) Vikram Purohit, Morgan Stanley.

Vikram Purohit

Hi, good morning. Thanks for taking our questions.
We had two one on mobility, one on the pipeline costs for identity. Could you talk a bit more about how you expect the sales force expansion you completed recently to help fund kind of inflect scripts and inflect sales throughout the the rest of the year and whether you'd expect them there would be kind of a visible kind of acute lifting in either of those metrics over the next couple of quarters. And then secondly, on for solriamfetol in ADHD, can you confirm is this Phase three readout expected in the second half of the year? Is this going to be other study based on which you can submit potentially a filing for the indication? And then also, if you could just kind of frame out for us what you'll be reporting and what you would think constitutes a successful readout here would be helpful.
Thank you.

Ari Maizel

Yes, I'll start with the ABILITY question. So sales force expansion, we are seeing an impact on certainly on activity levels and effort with customers, we're seeing a roughly a 40% increase in weekly calls to customers. We are engaging with a broader group of providers that includes a primary care audience and we are seeing that a meaningful increase in new prescriptions and total prescriptions from primary care, which is sort of commensurate with the additional focus we've been able to provide with the expanded sales team. I would say that we're in the early phases of seeing the impact from a demand perspective and referenced on the opening comments that we've seen a 30% increase in weekly new patient starts. That is typically the first indicator that demand growth is reaching an inflection point, but it's still early days in many ways, and we expect that growth to continue over time. So we feel really optimistic about the impact the sales force expansion has had thus far and expect that to continue to build over the course of the year.

Vikram Purohit

Great.

Herriot Tabuteau

And with regards to solriamfetol and you currently used these studies, that Phase three trial is registration trial. So we'll see the study that would enable an NDA filing along with a study in pediatric patients. So we do need to include that data and efficacy data from pediatric patients that's required for any kind of EHTE. filing so we're looking forward to the results from the FOCUS three trial in the second half of this year. We're on track for that as it relates to what we're looking for well, I think the first thing that we're looking for is to demonstrate efficacy in the first large multicenter, randomized parallel group study. So that's what we're looking for the result of that will inform the profile of the product. There has been one prior study with solriamfetol in ADHD, which we sponsored that was an investigator-initiated trial that was a single center study so this will be the focus that in the first multicenter trial.

Operator

(Operator Instructions) Matt Kaplan, Ladenburg Thalmann.

Matthew Kaplan

And good morning, guys, and congrats on the quarterly results.
Just a quick follow up on the ADHD program for solriamfetol.
Will you I guess, wait for the readout of the adult study prior to starting the pediatric study in ADHD.

Herriot Tabuteau

Now we would not know our goal is to start the pediatric study as soon as practicable.

Matthew Kaplan

Great. Thanks.

Operator

(Operator Instructions) Myles Minter, William Blair.

Myles Minter

Hey, guys, thanks for taking the questions. Just on the Alzheimer's disease agitation program, urine rolling from the open-label extension of advance to in to this new code to study. So does that really imply that you've already got all of the long-term safety data that is required for potential excess or five filing for that indication.
And then the second one is about the messaging that I two could be a pivotal study if it is required. Why is that the case when I believe I called One went through some protocol amendments and was obviously concluded early. And I think the messaging was that that may have been pivotal when it first started and it turns out it wasn't. So I guess what has changed? They're saying that according to would be pivotal on accord. Thanks.

Herriot Tabuteau

Thanks. Thanks for the questions. With regards to why the open-label extension study. So we continue to land to enroll the open-label safety extension trial. As a reminder, that requires all what we're trying to do to meet ICH guidelines, which are 300 patients treated for six months and 100 patients treated for one year, and we're well on track to accomplish those goals. So of course, you does not affect that and then also the patients are on leave or complete the Cohort two, also able to then go on and continue to dose. So we're very comfortable with regards to more than the necessary number of patients as it relates to one according to the pivotal study and and also in comparing that to Akorn one.
So what's nice about 1.2 is we've completed Cohort one. And so all of the learnings in terms of in terms of our confidence around endpoint, what could be necessary in a study like this, we have and so we're able to design according to very prospectively. And um, we have, um, also received that feedback from the FDA that this could be a registration trial based on the design so I think that is, in fact, the of it, of course, to more designing and we have designed it with the benefit of the knowledge from a core one and what is the benefit in this case.

Myles Minter

Thanks for the question.

Operator

(Operator Instructions) Troy Langford, TD Cowan.

Troy Langford

Congrats on all the progress this quarter. And thanks for taking our question on active 14, how confident do you feel that you it has all it would need for the from a clinical efficacy perspective to approve the application.
And then on Sunosi, can you just provide any additional color on the powering assumptions for the Phase three trial in MDD?

Herriot Tabuteau

to our rate of uptake? A 14 mark. So we're targeting this quarter here in the in terms of content. That's that that's substantially complete. So we'll those things are being finalized and really building out the submissions and we're going through that.
We're going to take the time to get that now as robust as possible, but it's over to work is substantially complete as it relates to the powering for solriamfetol in MDD. We powered that study similar to solely to the way that we powered our other studies in major depressive disorder. So and as you know, we do have quite a bit of experience there with the ability program. So one, so think about the powering as being similar. And I think in general for these studies, the effect sizes, which one would expect with these growth, it is very well laid out and there's a lot of precedent. So that's how we empower the state.
So to summarize, it is 90% powered to detect an effect size, which is similar to the effect size which we detected in the allelic program.

Troy Langford

Great. Thanks for the color.

Operator

Since there are no more questions, I will now turn the call back over to AxSYM CEO for concluding remarks.

Herriot Tabuteau

Well, thank you for taking the time to join us for today's quarterly update the first quarter of 2020 for March, strong progress ranks, and we look to continue our focus on commercial and pipeline execution throughout the balance of the year with a goal of delivering innovation and value to patients health care professionals and investors alike. Thank you and have a great rest of your day.

Operator

This concludes today's conference. Thank you for your participation. You may disconnect your lines at this time.