Antidepressant drugs have been on the market since the 1950s, but Axsome Therapeutics is betting its new treatment will have a major impact on patients and doctors.
In late October, the company launched Auvelity, a prescription-only, fast-acting, oral medication aimed to treat an adult patient with major depressive disorder in as little as a week. It combines dextromethorphan, a cough suppressant, and bupropion, a medication for depression.
While the novel combination gave the drug a breakthrough therapy designation, the problem lies in how well it will contend with other recent products as well as older ones.
“It’s been very deliberate,” said Axsome CEO Herriot Tabuteau of his company’s mission and strategy during the Guggenheim 4th Annual Immunology and Neurology Conference earlier this month. “We’ve remained in [the central nervous system]. We’ve focused on areas where there is a high unmet medical need. We’ve shown that we can develop products and get them approved, and now we’re launching them.”
The press-shy neuroscientist used to work as an investment banker at Goldman Sachs before founding his company in 2012. While he rarely speaks to the media, he does attend several events and conferences throughout the year.
Regardless of his willingness to speak to the press, he and his team will need to continue its quick progression from development and research to commercialization of its pipeline while competing in a mental health landscape that’s seen several successes and failures when it comes to major depressive disorder treatments.
Auvelity will face steep competition from medications like Prozac and Zoloft as well as other generic drugs, forcing Axsome to get its product in front of clinicians and through insurance verifications as quickly as possible for a chance at success. Analysts say if Auvelity’s first year sales and prescription conversions don’t go well, the company could risk crumbling even with the other central nervous system products in its pipeline.
Since Axsome has a limited operating history as well as a short record of commercialization, the current evaluation of the company and its products is difficult. The first hurdle it faces is getting its brand name antidepressant to treatment-resistant patients, since they are the most likely who will be able to try a new drug in the market.
Earlier this month during the company’s third quarter conference call Lori Englebert, Axsome’s senior vice president of commercial and business development, said that the company had provided key information to more than 15% of its prescriber target list through its digital sales platform.
Axsome expects a bulk of its sales to come from commercial payors, but new therapies are blocked for the first six months after it launches. Due to that, the company will be unable to generate sales through this channel until the spring, making interactions with its prescribers list crucial. A 30-tablet supply of Auvelity averages around $650 without insurance according to goodRx.com.
It can, however, provide the antidepressant to Medicare and Medicaid patients because they are protected channels. The company’s patient support services offers $10 per month savings cards for those who are eligible as well as samples, according to Englebert. The company also provides prior authorization support to healthcare providers.
Samples and support to patients and clinicians should help supply data that’ll measure the product’s success, said Yatin Suneja, senior managing director at Guggenheim Partners. These metrics are being aggregated by a third-party data collector for incremental release, according to analysts and the company.
It is unclear how long the list is or how many clinicians have decided to start sampling or prescribing the medication. Axsome did not respond to requests for comment.
With little known as to how the company exactly expects to assure sales, Chris Howerton, an analyst at Jefferies, said Axsome’s trickle of information isn’t enough.
“That’s the kind of information gap that us in the outside world are pretty much craving at this point,” he said.
Depression is common worldwide, with approximately 5% of the total adult population navigating life with the illness, according to the World Health Organization. In 2020, an estimated 21 million adults in the United States, or 8.4% of the adult population, had at least one major depressive episode, according to a study by the National Institute of Mental Health.
“Antidepressants are not perfect, but antidepressants do help a substantial number of people,” said Roger McIntyre, a professor of psychiatry and pharmacology at the University of Toronto, Canada.
A study from the Centers for Disease Control and Prevention said that between 2015 and 2018, 13.2% of American adults used antidepressants.
For Margo Hendricks, a 74-year-old woman from Sparks, Nevada who uses antidepressants for anxiety, the ability to participate in everyday activities is important, noting that Zoloft had rendered her a zombie before she switched to her current medication.
“All I did was sleep. I’d take it and I’d just go down,” Hendricks said. “I rarely had time to do even a few things, so having a greater list of options so that you can figure out what works for you to help you function is important.”
She said she thinks Auvelity could be beneficial to those who have similar feelings about other antidepressants that didn’t work well for them.
On webMD.com, a female reviewer between the age of 45 and 55 who went by the name Snow White said she’s used Auvelity for less than a month and it has helped her sleep better, feel well rested and reduce her usual cravings.
“This medicine has had the most observable effect of anything I’ve tried in years and has lifted my fog of hopelessness,” she said.
Although it is still the early days of Auvelity’s launch, Axsome can still use other companies that have brought an antidepressant to the market in the last decade as a guide.
One treatment continuing to face problems since its launch is Spravato, an esketamine nasal spray that has to be taken with an oral antidepressant. It received approval from the Food and Drug Administration in 2020 and is marketed by Johnson & Johnson’s Janssen unit.
“My understanding is it has a lot of other baggage,” said David Hoang, the director of U.S. equity research, healthcare at SMBC Nikko Securities America. “It’s a little bit harder to administer given some of the other requirements and so the uptake has probably not been great and the sales probably reflect that.”
Although Axsome’s Auvelity isn’t a nasal spray and doesn’t include a Schedule III compound, it will have to compete against Spravato and other medications.
Trintellix, a popular antidepressant, has been marketed by Takeda Pharmaceuticals America, Inc. and H. Lundbeck A/S in the United States since 2013.
Worldwide sales of Trintellix, which is also marketed as Brintellix, rose 24% to about $437 million (DKK 3.177 billion) in the first nine months of 2022 compared with the year-ago period.
“Six to 12 months from now, we really want to see the Axsome drug look more like Trintellix has done, than what the ketamine formulation from Janssen has done,” Hoang said.
Analysts estimate Axsome’s revenue will reach $49.5 million by the end of 2022 and more than double that to $172.9 million by the end of next year. Its net loss is expected to reach $166.8 million this year and $125.5 million in 2023.
A majority of Axsome’s revenue this year and the beginning of next year are slated to come from a different drug it has on the market, though. Sunosi, which aids with wakefulness in patients with sleep apnea, was acquired from Jazz Pharmaceuticals for $53 million and started generating revenue in May.
While the $25.6 million in revenue from Sunosi is considered to be a tiny slice of the pie for Axsome’s future, Howerton, from Jefferies, said it does show that the company can successfully market a product.
If Auvelity succeeds, analysts said the company will likely pay back its $300 million existing loan with Hercules Capital Inc, a venture capitalist firm, and become cash flow positive by 2025.
The company, on the other hand, expects its operating expenses to grow through 2025 and beyond as it continues to commercialize other treatments in its pipeline. In the first nine months of 2022 it spent $97.7 million on selling general and administrative expenses, up 104% from a year earlier due in part to marketing for Sunosi and now Auvelity.
As Axsome’s future is contingent upon its products’ success, patients and clinicians will be the deciding factor regardless of the outlook analysts or investors have on the company’s potential.
“We just need to think about what is the real there versus what’s the hype and if it can help people, that’ll be great,” McIntyre, the professor, said.