Axsome Therapeutics, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. Although the request identifies 2021 Q4, this filing reports full-year results, not standalone fourth-quarter results. Axsome is a clinical-stage biopharmaceutical company focused on central nervous system disorders; it had no approved products or product sales in 2021.
Financial results and liquidity
| Metric | FY2021 | FY2020 |
|---|---|---|
| Revenue | $0 | $0 |
| Research and development expense | $58.1 million | $70.2 million |
| General and administrative expense | $66.6 million | $28.9 million |
| Operating loss | $124.7 million | $99.1 million |
| Net loss | $130.4 million | $102.9 million |
| Net loss per share, basic and diluted | $3.47 | $2.77 |
| Cash used in operating activities | $108.2 million | $78.5 million |
| Cash and cash equivalents at year-end | $86.5 million | $183.9 million |
As a pre-commercial company, revenue-based margins are not applicable. Year-end total assets were $87.8 million, total liabilities $72.2 million, and stockholders’ equity $15.6 million. The balance sheet reported $49.1 million of long-term loan payable, representing $50.0 million principal less unamortized debt discount and adjusted for the final payment fee. The loan is secured by substantially all assets, including intellectual property.
Management said available cash and committed Hercules loan capital were expected to fund its current plan, including potential commercial launches of AXS-05 and AXS-07, into 2024, assuming both approvals in 2022 and access to related loan tranches. If approvals were not obtained or delayed, management estimated available cash could fund operations for at least 12 months. These estimates depend on assumptions and are not a guarantee of funding.
Material changes versus FY2020
- Net loss increased by $27.5 million, while operating cash use rose by $29.8 million.
- R&D expense declined $12.2 million, mainly because FY2020 included a $10.2 million Pfizer license charge and several trials concluded.
- G&A expense increased $37.7 million, primarily from higher stock-based compensation and commercial-function build-out. Stock-based compensation totaled $20.8 million in FY2021 versus $14.8 million in FY2020.
- Cash declined $97.4 million during FY2021. Financing activities provided $11.1 million, chiefly from at-the-market stock sales and employee option exercises; no term-loan proceeds were drawn in 2021.
- In October 2021, the Hercules facility was amended: maximum borrowing capacity increased from $225 million to $300 million, maturity extended to October 2026 (with a conditional option to October 2027), the interest-only period was extended, and the stated minimum interest rate decreased from 9.15% to 8.95%.
Pipeline, outlook, and key risks
- AXS-05, major depressive disorder: NDA accepted for Priority Review, but FDA review was not completed by the August 22, 2021 target date and remained ongoing at the filing. AXS-05 also achieved the primary endpoint in the ADVANCE Alzheimer’s agitation trial; a Phase 3 relapse-prevention study was underway. The company planned a pivotal Phase 2/3 smoking-cessation trial following FDA Pre-IND feedback.
- AXS-07, acute migraine: NDA accepted for filing with an April 30, 2022 PDUFA target date. The company reported positive pivotal Phase 3 MOMENTUM and INTERCEPT results.
- AXS-12, narcolepsy: Phase 3 SYMPHONY began in 2021; topline results were anticipated in the first half of 2023. FDA had rescinded its Breakthrough Therapy designation after approval of another drug for cataplexy in narcolepsy.
- AXS-14, fibromyalgia: The company planned to submit an NDA in 2023, relying on Pfizer’s previously completed Phase 2 and Phase 3 studies.
- Outlook: Management expected expenses and losses to continue as development, regulatory work, and pre-commercialization activity progressed. The filing provides no revenue or profitability guidance. Future results depend on FDA decisions, clinical outcomes, launch execution, reimbursement, manufacturing, and access to capital.
- Principal risks: No product approvals or product revenue at year-end; substantial ongoing cash burn; regulatory review uncertainty, including the AXS-05 delay; clinical and safety risks; reliance on contract manufacturers and research organizations; competition and payer pricing pressure; and loan covenants and repayment obligations. COVID-19 could disrupt trials, inspections, supply, or financing, although the company reported no significant trial impact to date.
- Unusual and governance items: Pfizer may receive up to $323 million in milestones plus royalties under the AXS-12/AXS-14 license. AXS-05 licenses require royalties to Antecip, an entity owned by the CEO and board chair, presenting a disclosed related-party conflict. The company reported no material pending legal proceedings. The auditor gave unqualified opinions on the financial statements and internal controls; management also concluded controls were effective.
Important facts for investors to verify
- Current FDA status and any subsequent action on the AXS-05 and AXS-07 NDAs, including whether expected loan tranches became available.
- Updated cash runway, actual borrowing availability, outstanding debt, interest terms, and compliance with Hercules covenants.
- Commercial launch costs, payer coverage, pricing, uptake, and product revenue following any approval.
- Progress and results for the AXS-05 Alzheimer’s agitation program, AXS-12 Phase 3 trial, and planned AXS-14 and smoking-cessation studies.
- Potential dilution from equity financing and stock awards, and the financial effect of Pfizer milestones/royalties and Antecip royalties.