Axsome Therapeutics (AXSM) Q2 2023 Earnings Call Transcript

Axsome Therapeutics (AXSM 0.27%)
Q2 2023 Earnings Call
Aug 07, 2023, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Hello, and welcome to the Axsome Therapeutics second quarter results conference call and webcast. [Operator instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Mark Jacobson, chief operating officer at Axsome Therapeutics. Please go ahead, Mark.

Mark Jacobson -- Chief Operating Officer

Thank you, operator. 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 second quarter of 2023. 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, or plans to present or report additional data; the anticipated conduct and the source of future clinical trials; regulatory plan for future research and development plans, our commercial plans regarding Sunosi, Auvelity, 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 report.

You are cautioned not to place undue reliance on these forward-looking statements, which are made only 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; and Lori Englebert, executive vice president of commercial and business development.

Herriot will provide an overview of the company and progress made in the second quarter of 2023, as well as key upcoming milestones. Following Herriot, Nick will review our financial results, then Lori 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 -- Chief Executive Officer

Thank you, Mark. Good morning, everyone, and thank you for joining Axsome Therapeutics' second quarter 2023 financial results and business update conference call. In the second quarter, we continue to execute across all areas of our business. We drove continued success in the commercialization of Auvelity and Sunosi, advanced our late-stage product pipeline, and further solidified our financial foundation through a public equity offering that provided us significant operational flexibility and strength.

The total net product sales in the quarter were 46.7 million, driven by strong performances from both Auvelity and Sunosi. Based on the growing Auvelity prescription trends to date and positive feedback from clinicians, we are increasing the Auvelity sales force by nearly 100 representatives. In conjunction with our digital centric commercialization or DTC platform, the expansion should nearly double the number of prescribers we are able to reach. Later in the call, Lori will comment further on our commercial performance and Nick will provide additional details on our financials.

In conjunction with the commercial performance, our first-in-class development pipeline continues to expand and advance. With respect to solriamfetol, our dopamine and norepinephrine reuptake inhibitor and TAAR1 agonist, we recently initiated the focused phase 3 trial in ADHD. Today, we are pleased to announce the launch of two new high-value potential indications for solriamfetol. Binge eating disorder and excessive sleepiness is associated with shift work disorder.

Binge eating disorder is the most common eating disorder, affecting approximately 2.8% of U.S. adults. There is currently only one FDA-approved product for this indication. We recently received positive pre-IND meeting feedback from the FDA for this program and are preparing to initiate a phase 3 trial in patients with binge eating disorder before the end of this year.

Turning to shift work disorder, an estimated nearly one-third of Americans' perform shift work, of whom 10% to 43% are diagnosed with shift work disorder. There are currently only two FDA-approved products for the treatment of excessive sleepiness associated with shift work disorder. We also recently received positive pre-IND meeting feedback from the FDA for this program and are preparing to initiate a phase 3 trial in shift work disorder in the first quarter of 2024. The target indications of ADHD, binge eating disorder and shift work disorder, have the potential to dramatically increase the number of patients solriamfetol could help if successful in clinical testing, further growing our already first-in-class CNS pipeline.

Stay tuned for more updates on these programs and the rest of our leading late-stage CNS pipeline. We are excited by the number of value-creating opportunities that lie ahead of us. We anticipate completion of the phase 3 SYMPHONY trial of AXS-12 for the treatment of narcolepsy in the fourth quarter of this year. We continue to see steady enrollment in the phase 3 ADVANCE-2 trial of AXS-05 for the treatment of Alzheimer's disease agitation, and we remain on track to complete ADVANCE-2 in the first half of 2024.

We are making progress toward initiating the planned phase 2/3 trial of AXS-05 in smoking cessation, which is scheduled to start in the fourth quarter of this year or the first quarter of 2024. Additionally, the team is nearing finalization of the work for the resubmission of the NDA for AXS-07 in migraine. This work has moved at a slower pace than anticipated. And as a result, we now expect to resubmit the NDA in the first half of 2024.

With respect to the planned NDA submission for AXS-14 for the management of fibromyalgia, we are making good progress and our working to finalize the content and data sets that will complete the submission. We are tracking to an NDA submission in the fourth quarter of this year to the first quarter of next year. Each of these potential milestones builds value for our stakeholders, and we continue to make strategic decisions to maximize the potential for future growth. Lastly, we recently closed an underwritten public offering of common stock that resulted in $258.8 million in gross proceeds, fortifying our financial foundation and providing additional flexibility to execute on multiple fronts, not only expanding commercial activities by strategically expanding our sales force, but also by adding the aforementioned new indications for solriamfetol that may serve to maximize the product's potential.

Lori and Nick will each discuss in further detail how the financing amplifies our ability to revalue across our portfolio. All in all, we expect a productive second half of 2023 that sets us up for multiple milestones over the next 12 months. I will now turn the call to Nick, who will provide details of our financial performance.

Nick Pizzie -- Chief Financial Officer

Thank you, Herriot, and good morning. Today, I will discuss our second quarter results and provide some financial guidance. Total revenue in the second quarter of 2023 was $46.7 million, consisting of net sales of our two commercialized products, Auvelity and Sunosi, and royalty revenue from Sunosi sales and out-licensed territories. Revenue for the comparable period was $8.8 million comprised of U.S.

Sunosi sales beginning May 9th of 2022. Auvelity net sales in the quarter were $27.6 million, representing 76% sequential growth. There were no net sales in comparable 2022 period due to the timing of the launch. Sunosi revenue for the quarter was $19.1 million.

U.S. Sunosi sales were $17.8 million. International Sunosi revenue was 1.3 million, including approximately 700,000 in royalty revenue from Sunosi sales in the out-licensed territories. Sunosi's net sales for the comparable period were $8.8 million consisting of U.S.

sales beginning May 9, 2022. Cost of revenue was $4.6 million in the second quarter compared to $1 million in the prior-year period. The increase reflects the higher product volumes for both Auvelity and Sunosi in the current year. Research and development expenses were $20.6 million in the second quarter versus $15.8 million for the comparable period in 2022.

The increase was primarily related to higher personnel costs associated with supporting ongoing clinical trials, post-marketing commitments for Sunosi and Auvelity, and noncash stock compensation expense. Selling, general, and administrative expenses were $78.9 million for the second quarter versus $31.2 million for the comparable period in 2022. The increase was primarily related to commercial activities for Auvelity and Sunosi and higher noncash stock compensation expense due to the buildout of both commercial teams. Net loss for the second quarter was $67.2 million, or $1.54 per share, versus a net loss of 41.4 million or $1.06 per share for the comparable period in 2022.

We ended the quarter with $437.1 million in cash and cash equivalents compared to $200.8 million as of the previous year-end. Our second quarter cash balance reflects the net proceeds received from our common stock public offering completed in June. In connection with this public offering, in July of 2023, the underwriters fully exercised their option to purchase an additional 15% of the offering resulting in additional gross proceeds to Axsome of $33.8 million. Inclusive of this event, the pro forma June 30, 2023 cash balance was $469 million.

I will now turn the call over to Lori, who will provide a commercial update.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Thank you, Nick, and good morning, everyone. In the second quarter, both Auvelity and Sunosi delivered strong growth results. For Auvelity, we are still early in the launch phase and focused on executing our commercial strategy. With that said, early adoption by prescribers is robust and a promising indicator of future success.

For Sunosi, the second quarter of 2023 marked one full year of Sunosi being commercialized by Axsome. We have begun to see the results from the relaunch of Sunosi, which is resulting in healthy growth quarter over quarter. We expect a strong performance for both brands to continue in the second half of 2023. The second quarter represents only the second full quarter for Auvelity, and we are pleased with the progress we are making with the launch.

Important key indicators of the success of the launch are script growth, new patient starts, and HCP adoption. In Q2, approximately 53,000 prescriptions were reported for Auvelity, representing a growth of 72% quarter over quarter. In the second quarter, HCPs wrote prescriptions for 17,000 new patients, bringing the total number of unique patients on Auvelity to over 38,000 at the end of Q2. This prescription growth came from both an increased depth of prescribing with our early HCP adopters, as well as an increased breadth of new prescribers.

In the second quarter, we added approximately 3,700 new first-time prescribers Auvelity, increasing the cumulative total number of prescribers since launch to over 9,700. About 40% of our initial target universe has written Auvelity after only two full quarters. In response to this early success, we are expanding the Auvelity sales force from 162 to 260 specialty account managers. The expansion is expected to significantly increase our reach from 26,000 prescribers to approximately 44,000 prescribers, who currently write more than 80% of branded antidepressant prescriptions.

We believe that the expansion will help build on early success and accelerate launch uptake. With regard to payer coverage, we currently have coverage established for 68% of all covered lives. In the commercial channel, which is expected to be the primary channel for Auvelity, coverage is now at 46% of covered lives. And we look forward to additional formulary decisions in the coming months.

In the Medicaid and Medicare channels, approximately 100% of lives are covered. Major depressive disorder, or MDD, is highly prevalent and a major public health concern with the mental health crisis that the U.S. is currently facing. We are proud that Auvelity is providing an important and clinically differentiated therapeutic option for patients living with this chronic and devastating condition.

Turning to Sunosi, as mentioned previously, the second quarter of 2023 marked one full year of Sunosi being commercialized by Axsome. In the second quarter, we launched our pull an all-dayer campaign for Sunosi, which was a complete redesign and updated promotional campaign. We significantly invested in HCP and DTC directed media with the updated campaign and are seeing immediate results from these promotional efforts. Total prescriptions for Sunosi in the U.S.

grew 15% year over year and 8% quarter over quarter with net revenues that exceeded expectations. Since Q2 of last year, we have added greater than 13,000 unique new patients, which represents an increase of approximately 30% in cumulative unique patients over the past year. The sales team is working to drive growth depth within the current prescriber base and breadth by adding new prescribers. Since Q2 of last year, we have increased unique new writers of Sunosi by 24%.

Payer coverage for Sunosi remains broad with 95% of commercial lives and 83% of total lives covered. The growth potential for Sunosi in the currently approved indications remains substantial, as well as its growth in potential new target indications, such as ADHD, binge eating disorder, and shift work disorder. As a reminder, Sunosi is the first and only DNRI for excessive daytime sleepiness and obstructive sleep apnea and narcolepsy, and the first and only wake-promoting agent proven to improve wakefulness through nine hours. Sunosi is the only branded therapy available for patients who suffer from EDS and OSA, and we expect our increased and enhanced promotional and disease education efforts to drive continued growth for the product in 2023.

Q2 of 2023 saw the continuation of a strong launch of Auvelity and the continued execution of the relaunch efforts of Sunosi. Both products are clinically differentiated and address patient populations with high unmet need. We remain focused on commercial execution and expect continued commercial success for both products in the second half of the year. I will now turn the call back to Mark to lead the Q&A discussion.

Mark Jacobson -- Chief Operating Officer

Thank you, Lori. Operator, may we please have our first question?

Questions & Answers:

Operator

[Operator instructions] Our first question is coming from Charles Duncan from Cantor Fitzgerald. Your line is now live.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Yeah. Hey. Good morning, Herriot and team. Thanks for taking our questions.

Wanted to first of all start off with a congratulations on the strong revenue performance, as well as the broadening of pipeline progress. So, nice quarter. A couple of quick questions. First of all, with regard to an approval of a product candidate in postpartum depression, but not major depression disorder, I guess, I'm wondering if that changes your views on the competitive environment for Auvelity.

And if you can give us a sense of what most interests prescribers in its clinical profile, Auvelity's clinical profile, and why they're really prescribing the drug.

Herriot Tabuteau -- Chief Executive Officer

Thanks, Charles, for the question. In terms of what changes for our business and for what we're doing, it does not change our plans at all. As a reminder, major depressive disorder is highly prevalent. There are 22 million patients out there.

What we've seen with the launch thus far of Auvelity is that the clinical need is really great. And we've always anticipated that there would be space for multiple players. And as we've said in the past, you know, we also think that it's good that a lot of different drugs are being developed for major depression disorder because we want to make sure that patients get served and that clinicians have options. So, that's our passion.

And I know why you're asking the question and I know that the sell-side likes to pit companies against each other. Let me just say that we, here, at Axsome, you know, we focus at other companies at CNS as colleagues. We commend the Sage team for their work to provide a new treatment to patients with postpartum depression. We know from experience at Axsome that developing a new drug and getting it approved is really difficult, especially in CNS.

It takes the hard work and dedication and passion of a lot of talented individuals. That's what brings us in every day to work. And to that end, we are going to continue our work to make sure that we provide new treatments to patients, not just with depression, but also with other CNS medications. So, if you look at the expansion of our pipeline, thus far, as we announced today, it brings the total number of patients that we can help to 162 million patients in the U.S.

Charles Duncan -- Cantor Fitzgerald -- Analyst

That's helpful. And if I could ask just one follow-up regarding Axsome 007 -- or AXS-007, in migraine, I'm just wondering if you could provide any more color on the work streams required to enable the NDA filing. And also just remind us on the target product profile that you envision for the candidate that will serve an unmet need in migraine. Thank you.

Mark Jacobson -- Chief Operating Officer

Hey, Charles. This is Mark. I'll answer the first question about the workstream for the NDA resubmission. So, just to be clear, this is just taking us longer than expected, and it's not as though there were some setbacks since the last call that's going on behind the scenes.

So, we're taking our time to get this right. And what it is that we need to get right are finishing in additional batches that were requested of us by the FDA. As a reminder, the drug substance and drug product are new. The manufacturing, it is a cyclodextrin ring stabilized with a buffering system.

This is an act of innovation. It is the MoSEIC technology. So, FDA asked us for additional data to support the package. So, that work is underway.

It's just taking longer than expected. And we remain confident that we'll be able to get it done. And then, I'll pass on for the new product profile.

Herriot Tabuteau -- Chief Executive Officer

Right. Yeah, so just to a little bit with regard to the product profile question that you asked, Charles, the second part of your first question. Lori?

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah, so Charles, I'll switch back to Auvelity and answer the question on the most -- what most interest the physicians, but then I'll also answer the competitive piece on those other -- if helpful.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Thanks.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Sorry about that. What most interesting -- you know, what we're seeing out in the real world is I would say three things. One, obviously, the rapid onset of action is really impressive to HCPs, and we are seeing results very similar to what we saw in the clinical trials. The second piece is we are getting to a point now where we have enough patients on therapy where the durability is really starting to come through, the sustained effect of the product.

And so, that's really encouraging also to physicians. We are able to have a very large number of patients who achieved remission, and that is something that physicians are commenting on quite a bit on how fast, not only do symptoms improve, but we are able to achieve remission. Again, everything is very similar to what we're seeing in the clinical trials -- or what we saw in the clinical trials with remission as early as two weeks. But then, the last thing is the side effect profile.

So, the side effect profile is obviously favorable versus some of the competitors out there, and physicians and patients are both commenting on that. In terms of AXS-07, as Mark was mentioning, the MoSEIC technology really does allow for that very early onset of action for patients to reduce pain, despite the fact that there are multiple entrants in the category right now and a lot of activity and a lot of promotional dollars. Even now, more than 70% of patients still are dissatisfied with their current therapies. We know they cycle through therapies looking for something that's efficacious.

And so, we hope to bring this up into market as an option for them.

Charles Duncan -- Cantor Fitzgerald -- Analyst

Regarding Auvelity, you point out three key differentiations from Zurzuvae. So, thank you for the added color and congrats on the quarter.

Operator

Thank you. Next question is coming from Ram Selvaraju from H.C. Wainwright. Your line is now live.

Ram Selvaraju -- H.C. Wainwright and Company -- Analyst

Thanks so much for taking my questions, and congrats again on the quarter. I just wanted to ask a little bit about the kinetics of the sales force expansion for Auvelity. Within what timeframe do you expect that to be concluded, if you expect that new expanded size to effectively be the steady state for the sales force for the foreseeable future, or if any further expansion might be on the cards? And also, if you could, perhaps, comment on the sales force composition and what you see as the facility with which you're going to be able to execute those new hires from a pool of candidates who have prior CNS or antidepressant sales experience. Thank you.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Thanks. Sorry, if I don't get all of them, I just try and write down every question that you ask. So, if I missed something, please remind me. So, you know, we are intending to have the expansion rolled out and completed and ready to perform in Q4.

We are very much underway in building that expansion right now and have been for a little bit. Part of the reason why we think and believe so strongly that the expansion is needed right now is we are seeing such early success. You know, we have 10,000 HCP writers, 40,000 new patients or patients on therapy right now. We're adding about 1,000 HCPs or more than 1,000 HCPs every month.

And what we're seeing and why we're so encouraged is obviously sales forces at this stage of launch typically struggle between depth and breadth. We are trying to achieve both. And right now, you know, greater than 40% of our target list has already written. And remember, our target list is a very substantial target list with, you know, a very small sales force.

But also, of those 40% that have already written, 60% of those writers have found more than two patients all ready to write. And so, that's really encouraged from both a depth and a breadth standpoint, and we think that expanding the sales force will further accelerate the launch uptake. In terms of composition and pool of candidates, you know, our first recruit, I think we had greater than 90% with CNS experience, more than that with site experience. We are obviously going to -- you know, that is our goal for this expansion piece as well.

Ram Selvaraju -- H.C. Wainwright and Company -- Analyst

Thank you.

Operator

Thank you. Next question today is coming from Joon Lee from Truist Securities. Your line is now live.

Joon Lee -- Truist Securities -- Analyst

Hey, congrats on the strong quarter, and thanks for taking our questions. Any particular reason why the SYMPHONY trial in narcolepsy got pushed out to fourth quarter? And if by trial completion, you're also referring to, you know, completion and data readout, or just the trial completion itself? And also, similar to Alzheimer's agitation, if by completion of trial and first half of next year, we can also expect data in first half of next year? Thank you, and I have a quick follow-up.

Herriot Tabuteau -- Chief Executive Officer

Hi, Joon. Thanks for the questions. The -- with regard to SYMPHONY, we're on track to complete the study and report results out in the fourth quarter. And this is not a change from our last update.

And the reason for the granularity around the timing of the AXS-12 trial is that this is an often indication. And often indications, they're lumpy. So, we try and provide granularity as we get closer. And so, we're on track there.

With regards to --

Mark Jacobson -- Chief Operating Officer

Yeah. I think the nuance is that the prior guidance is completion of enrollment. This is completion of the study.

Joon Lee -- Truist Securities -- Analyst

Got it. That's really helpful. And similarly, with Alzheimer's agitation, we can also expect top-line data first half of next year? Or is that just a --

Herriot Tabuteau -- Chief Executive Officer

Yeah. And similarly, with the Alzheimer's disease agitation, so the guidance of trial completion also incorporates data readout.

Joon Lee -- Truist Securities -- Analyst

Perfect. And based on your experience with digital-centric commercial strategy, in partnership with Veeva, Is this something that you may also consider down the road for migraine, narcolepsy, or ADHD, or even Alzheimer's? Thank you.

Herriot Tabuteau -- Chief Executive Officer

The rationale behind putting together the platform is that we could leverage it for our entire pipeline. So, you know, we're very glad that we made that investment, and we're looking forward to leveraging it for really the vast pipeline that we have at late-stage product candidates.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah, Joon, I can just add one piece of commentary there. We are leveraging it for Sunosi now as well, so it is across both products that we are leveraging.

Joon Lee -- Truist Securities -- Analyst

Thank you.

Operator

Thank you. Next question today is coming from Jason Gerberry from Bank of America. Your line is now live.

Jason Gerberry -- Bank of America Merrill Lynch -- Analyst

Oh, hey, guys. Thanks for taking my question. I just wanted to come back to the sales force announcement. So, I guess, will these new reps just be covering physicians or providers that were not being called on prior? I'm just trying to get a sense of -- I think in the past, the digital strategy was sort of like, I thought, meant to improve breadth and productivity of each prescriber, but there's also maybe a rep that's calling on that provider.

So, just kind of wondering, like, what's changed, you know, in terms of how you'll leverage kind of the digital component and where the new rep will specifically be, you know, adding value.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah, thanks, Jason. So, I'll answer that question kind of in reverse. So, you know, our DCC platform, you know, was -- you know, part of our DCC platform is how our field is sized, as well as structured. It was intentionally structured so that we could maintain share voice, reach, you know, through omnichannel measures, as well as face-to-face and/or remote engagement with HCP by reps, at the same rate as sales forces two times our size.

So, that's why the DCC platform is so instrumental in how we reach HCP. In terms of the expansion of target, we originally were calling on about 26,000 HCP prescribers, and we are now taking that up to 44,000 prescribers. And I want to make -- you know, the reason that magnitude is so important in going up to 44,000 is they cover 90% of the branded therapies. But not only do they cover 90% of prescribing of antidepressants, they cover almost 90% of new branded therapies.

So, there are the ones that are writing. These are the HCPs -- the 44,000 are the HCPs that are writing and finding new patients to put branded therapies on. This is a very large expansion of a target list. So, it will be current targets and then in addition to going up to 44,000.

Jason Gerberry -- Bank of America Merrill Lynch -- Analyst

And if I could just ask a follow-up. So, under the older, I guess, approach with fewer reps, you would have just -- those added 20,000 providers. You would have just not caught on those physicians or just sort of tried to utilize digital means to get to those providers?

Lori Englebert -- Executive Vice President of Commercial and Business Development

That's right. It doesn't mean they weren't being touched or engaged with. They would just been touched or engaged with through digital or media efforts or nonpersonal promotion efforts. Now, we are having reps individually, calling them to detail the product.

Jason Gerberry -- Bank of America Merrill Lynch -- Analyst

Got it, got it. Thank you.

Operator

Thank you. Next question today is coming from David Amsellem from Piper Sandler. Your line is now live.

David Amsellem -- Piper Sandler -- Analyst

Hey, thanks. So, just a couple. So, first, on Sunosi, so you have a P4 filing, no surprise there. But I guess the question here is with all the label expansion opportunities that you're pursuing, how are you thinking about exclusivity runway for the product? I know there's a lot of patents in the orange book, but what have you been assuming, I guess, internally on what kind of exclusivity runway you think you'll have for the underlying molecule? So, that's number one.

And then, just going back to the sales force, as you're thinking about solriamfetol and ADHD in particular, what's the extent to which you're going to need further headcount, say, in the ped and adolescent psychiatry setting, in the pediatrician setting. And I guess the broader question is, how do you think about leveraging the headcount you're going to have in place with respect to solriamfetol? Thanks.

Herriot Tabuteau -- Chief Executive Officer

So, that's a lot of questions there. So, with regards to the label expansion and how we think about the exclusivity runway, so even with the current issued patents, we have exclusivity running out to at least 2040. And then, in addition to that, we also have recently allowed claims which go out to December 2022, and those cover all the new indications. 

Mark Jacobson -- Chief Operating Officer

That would be December 2042.

Herriot Tabuteau -- Chief Executive Officer

I'm sorry, December 2042. December 2042. So, that's an even longer exclusivity runway. And so, that covers all of the additional indications.

And then, with regards to the additional headcount, one of the things that we like -- and I'll turn over to Lori to provide a little bit more color. But one of the things that we do like is the overlap in the operational leverage with regards to our current neuropsychiatry sales force. ADHD is treated primarily by psychiatrists so that fits in very nicely with our current sales force and sales force expansion.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah, perfect. I don't know if I can add much more other than, you know, it's a bit early to talk about size and what that looks like because a lot of factors obviously come into play when you're thinking about what that overlap looks like at the time. And that is, you know, how entrenched we are with Auvelity, what that current sales force efficiency looks like, and whatnot. So, we definitely like the overlap.

Obviously, it's a very strategic thought from our standpoint in terms of how we structure the sales force. We always seek to be efficient and effective. So, it will be a consideration when it comes time to size that sales force.

Jason Gerberry -- Bank of America Merrill Lynch -- Analyst

Thank you.

Operator

Thank you. Next question today is coming from Vikram Purohit from Morgan Stanley. Your line is now live.

Vikram Purohit -- Morgan Stanley -- Analyst

Good morning. Thanks for taking our questions. So, just two for us on Auvelity. First, could you provide some additional color on the profile of patients receiving the drug in terms of prior treatment status and prior line of therapy and how this has been evolving over the past couple of months? And then, secondly, could you remind us your latest thinking on ex-U.S.

plans for commercialization? I believe in the past, you might have mentioned this is something you could evaluate a partnership for. So, just wanted to see if that's still your current thinking and, if so, how those internal discussions are going. Thanks.

Herriot Tabuteau -- Chief Executive Officer

Thanks for the questions. So, I'll answer the last question -- the second question, and then I'll turn it over to Lori to answer the question on the treatment profile. So, ex-U.S. plans, so we've always said that we would look to out-license the product, ex-U.S.

And so, those plans and that strategic direction has not changed. Lori?

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah, thanks, Vikram. You know, in the very early days of launch, we were, of course, getting that later line patient just based on, you know, mostly due to the unmet need and a new therapy coming to market, especially one of the novel methods of action. But as prescribers have gained experience with the product and seeing, you know, early success and in that patient population, they are starting to move the use up into earlier line. Right now, there is about 10% to 12% usage in first-line therapy, which is really encouraging because that typically means that physicians have seen success in patients that they fill warrants using the product profile benefit patients as early as first line.

But the majority that we're seeing right now is -- you know, it's roughly around 60% of patients that we're getting have failed either one or two prior therapies. As clinicians get more experienced with Auvelity -- and again, we are only two full quarters into launch, but as clinicians get more experience with Auvelity and our access evolves, we do expect it to be prescribed to people earlier in the treatment algorithm.

Vikram Purohit -- Morgan Stanley -- Analyst

Got it. Thank you.

Operator

Thank you. Next question today is coming from Yatin Suneja from Guggenheim Partners. Your line is now live.

Yatin Suneja -- Guggenheim Partners -- Analyst

Hey, guys. Thank you for taking my question. Just real quick ones. With regard to the narcolepsy, can you maybe just talk about hitting on the cognition endpoint there? Like, what do you need to show? Is that even important, maybe the benefit of showing cataplexy? Just trying to understand what the exact expectation would be.

And then, quickly, if you can just let us know what the gross-to-net. I missed it if you said it, what the gross-to-net was and maybe what the inventory is in the channel for Auvelity. Thanks.

Herriot Tabuteau -- Chief Executive Officer

Thanks for the questions. You know, with regards to AXS-12, cataplexy is the primary endpoint of the trial. We are also looking at other endpoints, and specifically, you know, the endpoints that we looked at in the phase 2 CONCERT study. One of those was cognition, as you mentioned.

So, we can demonstrate a reduction or improvement in Auvelity to concentrate in that trial. So, that's exploratory, obviously, but it's something that we're definitely looking at because cognition, cognitive difficulty, is one of the key symptoms, or one of the symptoms that's experienced by the majority of patients with narcolepsy.

Nick Pizzie -- Chief Financial Officer

Hi, Yatin. It's Nick. As it relates to the gross-to-net for Auvelity, the quarter was in the low to mid-50s. This was an improvement from the high upper 50s in Q1, mostly due to higher proportion of refills of the scripts, which have a more favorable GTN versus new scripts.

And I think your second question related to inventory is -- want to be clear that the performance for Auvelity was not impacted by changes in the inventory level. As we stated previously, normal inventory levels will be and remain around two weeks. So, no impact specifically as it relates to inventory levels.

Yatin Suneja -- Guggenheim Partners -- Analyst

Just one quick one on gross net. Do you expect that to -- I'm just curious how do you expect it to change over time? And once you have full reimbursement, just trying to understand where it should shake out. Thank you.

Nick Pizzie -- Chief Financial Officer

Thanks, Yatin. We expect the GTN for Auvelity to remain in that mid-50 range for the foreseeable future. It's obviously volatile depending on when payer access comes in, and then it offsets the copay reimbursement. So, for the foreseeable future, we expect in that mid-50 range for GTN.

Yatin Suneja -- Guggenheim Partners -- Analyst

Thank you.

Operator

Next question is coming from Marc Goodman from Leerink Partners. Your line is now live.

Unknown speaker

Thanks for taking our question. This is [Inaudible] on the line for Marc. Can you provide more color on the duration of effect and persistency for Auvelity? I know you're still in the early stage of launch, but any color will be helpful. And also, can you provide the gross net for Sunosi and trade changes in the quarter? Thanks.

Herriot Tabuteau -- Chief Executive Officer

Thanks for the question. Can you repeat the second part of the question? We have a little trouble hearing.

Unknown speaker

The second part is just wondering the gross net or inventory changes for Sunosi in the quarter.

Herriot Tabuteau -- Chief Executive Officer

OK, thanks. So, with regards to the duration of effect for Auvelity, what we saw in the clinical trials -- as you know, our clinical trials were six weeks and the primary endpoint was at six weeks. So, we showed early onset of action at one week, at two weeks, and basically at every time point and including at six weeks. And then, subsequently, in very large follow-on studies, we looked at the duration of effect.

Patients were treated out to at least one year. And what we saw was that the improvement either increased or was maintained out to at least one year. What we're seeing from the actual use of the product in the field, I think now, we have what, how many patients on drug?

Lori Englebert -- Executive Vice President of Commercial and Business Development

Forty thousand.

Herriot Tabuteau -- Chief Executive Officer

Yeah, 40,000 patients who've been treated with the product. It's still early, but the experience and the prescription trends support this. We're seeing that the patients are remaining on therapy at the rate that we would have expected.

Nick Pizzie -- Chief Financial Officer

Yeah, and as it relates to Sunosi GTN, it did improve slightly from Q1, typically due to the seasonality impacts. For Q2, we were in the low 50s for GTN. And I believe you asked also on inventory. As I stated on the previous question, inventory remains for Sunosi around that two-week level in general.

Unknown speaker

Got it, that's very helpful. Thank you. 

Operator

Thank you. Next question is coming from Joseph Thome from TD Cowen. Your line is now live.

Joe Thome -- TD Cowen -- Analyst

Hi there. Good morning. Thank you for taking my questions. Maybe the first one, I think you mentioned a little over 40% of the target, you know, writers have already written a prescription for Auvelity.

Maybe -- great to see the progress, but the remaining that have not written, maybe why are they waiting? Is it really just the lack of kind of in-person touch points, or is there something else that maybe this new sales force can emphasize with the product profile? And then, maybe second, is essentially, everyone that wants the drug, getting the drug, where do we stand with kind of prior authorizations? And should that ease over the next couple of quarters? Thank you.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah. Hey, Joseph, thanks for the question. So, I'll comment, you know, when a launch happens, what you typically see is that you have some very early adopters. And those early adopters will write, coming straight out of the gate are usually your most informed physicians.

Given that Auvelity has a novel mechanism of action, those writers who have it written, it certainly isn't due to lack of touch. It is what it is. You're now moving into a different physician type. They're typically called fast followers, or they wait and see how the early adopters use the product, and then they start to adopt.

That can be achieved through a lot of different means. That's either sales force, that's peer-to-peer speaker programs, which we are investing pretty heavily in through media. So, they are being touched. Now, we're just -- we're working through and into that natural phase of a launch where you have to educate the staff followers or the followers that come after your very early adopters.

And obviously, as we continue to add HCP, that more than a thousand new writers per month, we are seeing that adoption happen in that group as well. In terms of patients that want the product, we do have a very robust patient support services program, including savings cards, samples, and PA support for physicians' offices. So, we feel very, very confident that patients who want the product can get the product.

Joe Thome -- TD Cowen -- Analyst

Perfect, then maybe one quick follow-up. I guess, what are you seeing in terms of response rate based on prior line of therapy? Obviously, we saw the open-label data in antidepressant unresponsive patients and TRD patients, but you did have that, you know, phase 3 that didn't meet the mark in the TRD patient population. Are you seeing strong responses in TRD patients? Or is there an ideal place to spot this? Thank you.

Herriot Tabuteau -- Chief Executive Officer

Yeah, so we look at this pretty closely. In other words, you know, we studied the product inpatients with various lines of treatment. So, across the entire spectrum, from treatment-naive patients to inpatients with who meet the criteria for TRD. And what we saw in announcements in the past is that the product performs equally well.

So, you're seeing just as strong responses in patients with more naive, who received one line of treatment, and then who received multiple lines of treatment. So, that's really encouraging. And as a reminder, in open-label data, what we saw, the response rate was into the 80%-plus range in terms of patients who were responding.

Joe Thome -- TD Cowen -- Analyst

Great, thank you.

Operator

Thank you. Next question is coming from Matt Kaplan from Ladenburg Thalmann. Your line is now live.

Matt Kaplan -- Ladenburg Thalmann

Hi. Good morning, guys, and congrats on the strong quarter. I just wanted to focus a little bit more on the Sunosi and solriamfetol expansion into additional indications. Can you give us some more detail in terms of the positive feedback that you received from the FDA with respect to binge eating disorder and shift work disorder.

Specifically, how many studies will you need to complete to file for these indications, NDAs?

Herriot Tabuteau -- Chief Executive Officer

Thanks a lot for the questions, Matt. So, with regards to the FDA feedback that we received, we received feedback on the entire clinical development plan. In other words, our plan studies to get the products approved. So, for binging disorder, we will need two studies.

And for shift work, we'll need one study.

Matt Kaplan -- Ladenburg Thalmann

In terms of endpoints and -- for these studies, what will you be -- can you give us more detail on that?

Herriot Tabuteau -- Chief Executive Officer

So, typically, you know, we provide the details on the trial design and the endpoint of the trial once we've started the trial. So, we intend to -- so stay tuned, and we'll be providing you more details on both of those studies because we do intend to launch in very short order. So, binge eating disorder in the fourth quarter, and shift work disorder in the first quarter.

Matt Kaplan -- Ladenburg Thalmann

Great. And then, with respect to the initiation that you -- for the phase 3 study in ADHD, can you give us a little bit more detail in terms of the opportunity that you see Sunosi or solriamfetol filling in that indication?

Herriot Tabuteau -- Chief Executive Officer

Yeah. So, it's a very large patient population, as you know. You know, close to or maybe even not rivaling [Inaudible] so 17 million patients, you know, who have ADHD. And right now, if you think about the therapies that are available, they fall into roughly two categories.

You have the stimulants, which have seen very large effect sizes, but which have the issues with tolerability and scheduling. And then you have the nonstimulants, which have lower effect sizes. So, it remains to be seen, obviously, what we'll see with solriamfetol. That's why we're conducting the trial.

But the indications from what we've seen with regards to the currently approved indications. So [Inaudible] is that there's a very large effect size. And that does, in fact, translates to ADHD, and we think that it could provide significant benefit to patients and fulfill a need right now which is not addressed by the current treatments.

Matt Kaplan -- Ladenburg Thalmann

Thanks. Thanks, Herriot.

Operator

In the interest of time, we have time for two more questions. Our next question is coming from Graig Suvannavejh from Mizuho Securities. Your line is now live.

Graig Suvannavejh -- Mizuho Securities -- Analyst

OK. Thanks for taking my questions. Congrats on the quarter. Just my first one, on the sales force expansion, I was curious, we've seen a flattening of NRX growth on a four-week rolling basis, so I'm just wondering if the sales force expansion was somewhat related to seeing that.

Or does that sales force expansion, is there a contemplation of, perhaps, down the line additional sales force ads? And then, just my second question just on the pipeline updates, you know, there were a number of shifts in the timing, and I'm just trying to get a sense of what your current confidence in the new timelines that were laid out. Or are there potential uncertainties or swing factors that still exist that could trigger, you know, additional delays? Thanks.

Herriot Tabuteau -- Chief Executive Officer

So, I'll take the second question, and then Lori will take the first. With regards to the pipeline update, what we're trying to do is make decisions that will generate the most long-term value. So, we're fortunate to have so many different potential clinical programs which are high value and which are late-stage. So, a lot of this has to do with one, prioritization; and two, the natural uncertainties that occur with enrolling trials.

So, that's what you're seeing. So, we're very happy with where we are with the pipeline expansion. We think that that's the right thing to do. And also, we're very well resourced to execute and create value.

So, that's where we are. I think in the grant scheme of things, you know, any of these shifts is within the standard of use that you might expect with regards to the running kind of business that involves human beings. Lori?

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah. Hey, thanks, Graig. So, the very short answer is no. What we're seeing in terms of the trend has nothing to do with the need to expand the sales force.

The sales force is purely driven by the fact that we're seeing great adoption and fast uptake by physicians. What we're seeing and what we believe we're seeing in terms of the flatness is the trend that's pretty -- that we've seen basically since launch is where we'll go through about four weeks and then they pop. And right now, I think what we're feeling a little bit is the seasonality effect. Antidepressants typically go through a seasonality effect in the summer, particularly in Q3.

They can sometimes drop as much as 10% Q3 versus Q2. So, that is likely what we're seeing right now. And we're very confident in the fact that the sales force will add to that. But again, the sales force should be up and running in Q4.

Graig Suvannavejh -- Mizuho Securities -- Analyst

Thanks, Lori.

Operator

Thank you. Our final question today is coming from Myles Minter from William Blair. Your line is now live.

Myles Minter -- William Blair and Company -- Analyst

Thanks. I'll just keep it to one. I think you added 6% of commercial covered lives in the second quarter here, but you're mentioning that P&T meetings are ongoing or will occur in the next few months. Do you have line of thought as to what proportion of covered lives in the commercial channel that those meetings would be from plans that represent? And is your ultimate goal is still that 90% of covered lives in the commercial channel that are similar to your peers?

Lori Englebert -- Executive Vice President of Commercial and Business Development

Myles, could you maybe repeat the last part of that question. We had -- you faded out a little bit.

Myles Minter -- William Blair and Company -- Analyst

Yeah, it was just that is your goal still to aim to achieve about 90% of covered lives in the commercial channel that would be similar to [Technical Difficulty]?

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah, so I'll chime in and start. Nick might want to add some color around how we're thinking about it from a gross-to-net standpoint. But, you know, from our standpoint, our goal has always been in discussions with payers to make sure that we ensure that we are capturing the value of the novelness, the innovation that we bring to the market, as well as the clinical benefit of Auvelity. But also, we want to make sure that we ensure a path, you know, of access for patients.

There are 6.8 million patients who've failed prior therapy. And all of those patients are typically taking six to eight weeks to see any kind of response with another therapy. So, you know, the delayed onset of action with current therapies, low remission rates, we believe Auvelity's clinical profile can really bring value to both payers and to patients. So, we want to make sure that we're very careful to capture that value.

Nick, you want to add anything?

Nick Pizzie -- Chief Financial Officer

Yeah, I think you pretty much said it, Lori. Auvelity, I mean, it's a truly differentiated product, and we just really want to secure meaningful access while maintaining long-term value. But pretty much you said everything.

Lori Englebert -- Executive Vice President of Commercial and Business Development

Yeah, the only thing I'll add, Myles, is that, you know, the access that we have contracted with and the coverage that we have, it is very favorable. So, you know, payers are seeing the value of the product, and we want to just make sure we're being very, very cognizant of protecting that long-term value of the product.

Herriot Tabuteau -- Chief Executive Officer

Yeah. And then, just the last thing that I would add, you know, we're reporting the percentage of covered lives, which is 68%, which is great. It's a great place to be right now. But also, you know, while we can report, you know, real time what the percentage of covered lives is, that does not reflect ongoing progress.

So, stay tuned.

Myles Minter -- William Blair and Company -- Analyst

Thanks.

Operator

Thank you. We reached the end of our question-and-answer session. I'd like to turn the floor back over to management for your further closing comments.

Herriot Tabuteau -- Chief Executive Officer

Well, thank you again for taking the time out of your busy schedules to join us for today's update. We are excited to continue building our industry-leading CNS franchise through the back half of 2023. We anticipate a milestone-filled next few months with potential clinical trial details, new trial initiations, and new submissions. We are committed to ensuring continued success for the launch of Auvelity and commercial growth for Sunosi and our fast and always to achieving our goal of potentially having at least five marketed products by 2025.

We look forward to updating you on our progress and milestones throughout the rest of the year. Have a great rest of your day.

Operator

[Operator signoff]

Duration: 0 minutes

Call participants:

Mark Jacobson -- Chief Operating Officer

Herriot Tabuteau -- Chief Executive Officer

Nick Pizzie -- Chief Financial Officer

Lori Englebert -- Executive Vice President of Commercial and Business Development

Charles Duncan -- Cantor Fitzgerald -- Analyst

Ram Selvaraju -- H.C. Wainwright and Company -- Analyst

Joon Lee -- Truist Securities -- Analyst

Jason Gerberry -- Bank of America Merrill Lynch -- Analyst

David Amsellem -- Piper Sandler -- Analyst

Vikram Purohit -- Morgan Stanley -- Analyst

Yatin Suneja -- Guggenheim Partners -- Analyst

Unknown speaker

Joe Thome -- TD Cowen -- Analyst

Matt Kaplan -- Ladenburg Thalmann

Graig Suvannavejh -- Mizuho Securities -- Analyst

Myles Minter -- William Blair and Company -- Analyst

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