AXSM: Axsome Therapeutics Inc Analysis and Research Report

2018-02-08 - by Asif , Contributing Analyst - 380 views

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Business Overview

Axsome Therapeutics is a clinical-stage biopharmaceutical company developing novel therapies for central nervous system, or CNS, disorders for which there are limited treatment options. By focusing on this therapeutic area, Axsome Therapeutics is addressing significant and growing markets where current treatment options are limited or inadequate. The company's product candidate portfolio includes three clinical-stage candidates, AXS-05, AXS-02, and AXS-06, which Axsome Therapeutics is developing for multiple indications. Axsome Therapeutics is conducting a Phase 3 trial with AXS-05 in treatment resistant depression, or TRD, which the company refer to as the STRIDE-1 study, and a Phase 2/3 trial in agitation in patients with Alzheimer’s disease, or AD, which the company refer to as the ADVANCE-1 study. Axsome Therapeutics is also conducting a Phase 3 trial with AXS-02 in complex regional pain syndrome, or CRPS, which the company refer to as the CREATE-1 study, and a Phase 3 trial with AXS-02 in knee osteoarthritis, or OA, associated with bone marrow lesions, or BMLs, pursuant to a Special Protocol Assessment, or SPA, which the company refer to as the COAST-1 study. The company also plan to initiate a Phase 3 trial with AXS‑02 in chronic low back pain, or CLBP, associated with Modic changes, or MCs. Axsome Therapeutics has completed a Phase 1 trial of AXS-06. The company aim to become a fully integrated biopharmaceutical company that develops and commercializes differentiated therapies that expand the treatment options available to caregivers and improve the lives of patients living with CNS disorders.

AXS‑05 is an innovative fixed‑dose combination of dextromethorphan, or DM, and bupropion. Axsome Therapeutics is developing AXS‑05 initially for the treatment of the following two conditions: TRD and agitation in patients with AD. DM is active at multiple CNS receptors but is rapidly and extensively metabolized in humans. As a result, it is difficult to attain potential therapeutic plasma levels of DM when it is dosed as a single agent. AXS‑05 uses bupropion as a novel drug delivery method to inhibit DM metabolism and increase its bioavailability. Axsome Therapeutics has demonstrated in three Phase 1 trials that DM plasma levels are substantially increased into a potentially therapeutic range with the co‑administration of bupropion. Bupropion is itself active at distinct CNS receptors, providing the potential for an additive or synergistic effect. The company intend to seek U.S. Food and Drug Administration, or FDA, approval for AXS‑05 utilizing the 505(b)(2) regulatory development pathway.

The company's second product candidate, AXS‑02 (disodium zoledronate tetrahydrate), is a potentially first‑in‑class, oral, targeted, non‑opioid therapeutic for chronic pain. AXS‑02 is a potent inhibitor of osteoclasts, which are bone remodeling cells that break down bone tissue. Axsome Therapeutics is initially developing AXS‑02 for the treatment of pain in the following three conditions: CRPS; knee OA associated with BMLs; and CLBP associated with type 1 or mixed type 1 and type 2 MCs. These conditions exhibit target lesions or specific pathology that the company believe may be addressed by the mechanisms of action of AXS‑02, such as inhibition of osteoclast activity. These mechanisms may result in a reduction of pain in these conditions. Axsome Therapeutics has successfully completed a Phase 1 trial of AXS‑02 to characterize the pharmacokinetics of zoledronic acid and its effects on markers of bone resorption after oral administration of AXS‑02. The results of its Phase 1 trial demonstrated that oral administration of AXS‑02 tablets resulted in rapid absorption of zoledronic acid, which is the active molecule in AXS‑02 and the free acid form of disodium zoledronate tetrahydrate, and substantial suppression of bone resorption markers, which are proteins indicative of bone tissue breakdown. The company intend to seek FDA approval for AXS‑02 utilizing the 505(b)(2) regulatory development pathway. AXS‑02 has been granted Orphan Drug Designation by the FDA and Orphan Medicinal Product Designation by the European Medicines Agency, or EMA, for the treatment of CRPS.

The company's third product candidate, AXS 06, is a novel, oral, non-opioid, fixed-dose combination of MoSEIC™, or Molecular Solubility Enhanced Inclusion Complex, meloxicam and esomeprazole. Axsome Therapeutics is developing AXS-06 initially for the treatment of osteoarthritis and rheumatoid arthritis. Meloxicam is a long-acting nonsteroidal anti-inflammatory drug, or NSAID, with COX-2, an enzyme involved in inflammation and pain pathways, preferential inhibition and potent pain-relieving effects. However standard meloxicam has an extended time to maximum plasma concentration, or Tmax, which delays its onset of action. AXS-06 utilizes its proprietary MoSEIC™ technology to substantially increase the solubility and speed the absorption of meloxicam while maintaining durability of action. Esomeprazole is a proton pump inhibitor which lowers stomach acidity and which has been shown to reduce the occurrence of NSAID-induced gastrointestinal ulcers. AXS-06 is designed to provide rapid, effective pain relief, and to reduce the risk of NSAID-induced ulcers, with convenient once-daily dosing. Axsome Therapeutics has successfully completed a Phase 1 trial of AXS-06 to characterize the pharmacokinetics of meloxicam and esomeprazole after oral administration of AXS-06. The results of its Phase 1 trial demonstrated that the median Tmax for meloxicam, the trial’s primary endpoint, was nine times faster for AXS-06 as compared to standard meloxicam. The company intend to seek FDA approval for AXS 06 utilizing the 505(b)(2) regulatory development pathway.

Recent Developments

In October 2017, the company entered into a sales agreement, or the Sales Agreement, with Leerink Partners LLC, or Leerink, pursuant to which the company may sell up to $30 million in shares of its common stock from time to time through Leerink, acting as its sales agent, in one or more at-the-market offerings. Leerink is entitled to receive a commission of 3.0% of the gross proceeds for any shares sold under the Sales Agreement. Axsome Therapeutics is not required to sell shares under the Sales Agreement and any sales of shares will be made pursuant to the 2016 Shelf Registration Statement (as described below). No sales were made under the Sales Agreement through November 8, 2017.

In September 2017, the company announced that the interim efficacy analysis of the CREATE-1 trial is expected year-end 2017. The interim analysis for CREATE-1 will be performed by an independent data monitoring committee, or IDMC. The IDMC will also perform the planned interim analysis of the Phase 3 COAST-1 trial of AXS-02 in knee osteoarthritis (OA) associated with bone marrow lesions (BMLs). The IDMC will analyze both CREATE-1 and COAST-1 trials at the same committee meeting and the results of these analyses are expected late December 2017 to early January 2018.

In July 2017, the company announced that AXS-06 met the primary endpoint in a recently completed Phase 1 clinical trial. The company also received in July 2017, from the FDA, Pre-Investigational New Drug Application, or Pre-IND, written guidance on a proposed clinical developmental program for AXS-06 for the relief of the signs and symptoms of OA and RA, and the reduction in the risk of developing upper gastrointestinal ulcers in patients at risk of developing NSAID associated upper gastrointestinal ulcers.

Also in July 2017, the company enrolled the first patient in its ADVANCE-1 (Addressing Dementia Via Agitation-Centered Evaluation 1) study, a Phase 2/3 trial evaluating the efficacy and safety of AXS-05 for the treatment of AD agitation.

Since its incorporation in January 2012, its operations to date have included organizing and staffing its company, business planning, raising capital, developing its compounds, and engaging in other discovery and preclinical activities. Prior to its initial public offering, or IPO, in November 2015, the company financed its operations primarily through private placements of its convertible notes.

The company's ability to become profitable depends on its ability to generate revenue. The company do not expect to generate significant revenue unless and until the company or its collaborators obtain marketing approval for and successfully commercialize one of its product candidates.

Axsome Therapeutics has incurred significant operating and net losses since inception. The company incurred net losses of $21.5 million and $19.9 million for the nine months ended September 30, 2017 and 2016, respectively. The company's accumulated deficit as of September 30, 2017 was $69.2 million, and the company expect to incur significant expenses and increasing operating losses for the foreseeable future. The company expect its expenses to increase in connection with its ongoing activities, as the company continue the development and clinical trials of, and seek regulatory approval for, AXS‑02, AXS‑05, AXS-06, and any other product candidates that the company develop or in‑license and advance to clinical development. If the company obtain regulatory approval for a product candidate, the company expect to incur significant expenses in order to create an infrastructure to support the commercialization of the product candidate, including manufacturing, sales, marketing, and distribution functions. Accordingly, the company will need additional financing to support its continuing operations. The company will seek to fund its operations through public or private equity or debt financings or other sources. Adequate additional financing may not be available to it on acceptable terms, or at all. The company's failure to raise capital as and when needed would have a negative impact on its financial condition and its ability to pursue its business strategy. The company will need to generate significant revenue to achieve profitability, and the company may never do so.


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