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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2023

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________ to ________

Commission File Number 001-37635

 

AXSOME THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware

45-4241907

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

 

One World Trade Center

22nd Floor

New York, New York

10007

(Address of principal executive offices)

(Zip Code)

 

Registrant’s telephone number, including area code: (212) 332-3241

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer

Accelerated Filer

Non-accelerated filer

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class:

 

Trading Symbol(s)

 

Name of each exchange on which registered:

Common Stock, Par Value $0.0001 Per Share

 

AXSM

 

The Nasdaq Global Market

 

There were 47,319,547 shares of the registrant’s common stock, $0.0001 par value, outstanding as of October 31, 2023.

 

 


Table of Contents

AXSOME THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED September 30, 2023

 

TABLE OF CONTENTS

 

 

 

 

Page

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

3

PART I — FINANCIAL INFORMATION

 

 

ITEM 1

Financial Statements

 

4

ITEM 2

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

33

ITEM 3

Quantitative and Qualitative Disclosure About Market Risk

 

45

ITEM 4

Controls and Procedures

 

45

PART II — OTHER INFORMATION

 

 

ITEM 1

Legal Proceedings

 

46

ITEM 1A

Risk Factors

 

46

ITEM 5

Other Information

 

95

ITEM 6

Exhibits

 

96

Signatures

 

 

97

 

2


Table of Contents

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain matters discussed in this report, including matters discussed under the caption “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” may constitute forward-looking statements for purposes of the Securities Act of 1933, as amended, or the Securities Act, and the Securities Exchange Act of 1934, as amended, or the Exchange Act, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from the future results, performance or achievements expressed or implied by such forward-looking statements. The words “anticipate,” “believe,” “estimate,” “may,” “expect” and similar expressions are generally intended to identify forward-looking statements. Our actual results may differ materially from the results anticipated in these forward-looking statements due to a variety of factors, including, without limitation, those discussed under the captions “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this report, as well as other factors which may be identified from time to time in our other filings with the Securities and Exchange Commission, or the SEC, or in the documents where such forward-looking statements appear. All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by these cautionary statements. Such forward-looking statements include, but are not limited to, statements about:

our expectations for increases or decreases in expenses;
our expectations for the clinical and preclinical development, manufacturing, regulatory approval, and commercialization of our pharmaceutical product candidates or any other products that we may acquire or in-license;
our estimates of the sufficiency of our existing capital resources combined with future anticipated cash flows to finance our operating requirements;
our expectations for incurring capital expenditures to expand our research and development and manufacturing capabilities;
unforeseen circumstances or other disruptions to normal business operations arising from or related to COVID-19;
our future revenue projections, sales forecasts, and potential peak market data;
our expectations for becoming profitable on a sustained basis;
our expectations or ability to enter into marketing and other partnership agreements;
our expectations or ability to enter into product acquisition and in-licensing transactions;
our expectations or ability to expand our own commercial infrastructure to manufacture, market and sell our products;
our expected losses;
our ability to obtain and maintain intellectual property protection for our products;
the acceptance of our products by doctors, patients, or payors;
our stock price and its volatility;
our ability to attract and retain key personnel;
the performance of our third-party manufacturers;
our expectations for future capital requirements; and
our ability to successfully implement our strategy.

The forward-looking statements contained in this report reflect our views and assumptions only as of the date that this report is signed. Except as required by law, we assume no responsibility for updating any forward-looking statements.

We qualify all of our forward-looking statements by these cautionary statements. In addition, with respect to all of our forward-looking statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.

3


Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Axsome Therapeutics, Inc.

Consolidated Balance Sheets

(In thousands, except for share and par value amounts)

 

 

September 30,

 

 

December 31,

 

 

 

2023

 

 

2022

 

 

 

(Unaudited)

 

 

 

 

Assets

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

Cash and cash equivalents

 

$

416,564

 

 

$

200,842

 

Accounts receivables, net

 

 

78,415

 

 

 

37,699

 

Inventories, net

 

 

9,985

 

 

 

4,320

 

Prepaid and other current assets

 

 

6,799

 

 

 

2,781

 

Total current assets

 

 

511,763

 

 

 

245,642

 

Equipment, net

 

 

971

 

 

 

722

 

Right-of-use asset - operating lease

 

 

7,068

 

 

 

420

 

Goodwill

 

 

12,042

 

 

 

10,310

 

Intangible asset, net

 

 

54,893

 

 

 

59,661

 

Non-current inventory and other assets

 

 

14,120

 

 

 

14,721

 

Total assets

 

$

600,857

 

 

$

331,476

 

Liabilities and stockholders’ equity

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

Accounts payable

 

$

29,098

 

 

$

38,605

 

Accrued expenses and other current liabilities

 

 

78,454

 

 

 

51,631

 

Operating lease liability, current portion

 

 

438

 

 

 

425

 

Contingent consideration, current

 

 

6,672

 

 

 

5,900

 

Total current liabilities

 

 

114,662

 

 

 

96,561

 

Contingent consideration, non-current

 

 

31,550

 

 

 

31,100

 

Loan payable, long-term

 

 

177,446

 

 

 

94,259

 

Operating lease liability, long-term

 

 

7,691

 

 

 

 

Total liabilities

 

 

331,349

 

 

 

221,920

 

Stockholders’ equity:

 

 

 

 

 

 

Preferred stock, $0.0001 par value per share (10,000,000 shares authorized, none issued and outstanding at September 30, 2023 and December 31, 2022, respectively)

 

 

 

 

 

 

Common stock, $0.0001 par value per share (150,000,000 shares authorized, 47,317,381 and 43,498,617 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively)

 

 

5

 

 

 

4

 

Additional paid-in capital

 

 

1,006,423

 

 

 

705,885

 

Accumulated deficit

 

 

(736,920

)

 

 

(596,333

)

Total stockholders’ equity

 

 

269,508

 

 

 

109,556

 

Total liabilities and stockholders’ equity

 

$

600,857

 

 

$

331,476

 

 

The accompanying notes are an integral part of the consolidated financial statements.

4


Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands, except for per share amounts)

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2023

 

 

2022

 

 

2023

 

 

2022

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

Product sales, net

 

$

57,127

 

 

$

16,846

 

 

$

131,713

 

 

$

25,666

 

License revenue

 

 

 

 

 

 

 

 

65,735

 

 

 

 

Royalty revenue

 

 

667

 

 

 

 

 

 

1,622

 

 

 

 

Total Revenues

 

 

57,794

 

 

 

16,846

 

 

 

199,070

 

 

 

25,666

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (excluding amortization and depreciation)

 

 

6,532

 

 

 

1,924

 

 

 

18,687

 

 

 

2,907

 

Research and development

 

 

28,767

 

 

 

14,877

 

 

 

67,141

 

 

 

43,254

 

Selling, general and administrative

 

 

83,188

 

 

 

40,892

 

 

 

236,314

 

 

 

97,756

 

Loss (Gain) in fair value of contingent consideration

 

 

(180

)

 

 

(42

)

 

 

5,711

 

 

 

(902

)

Intangible asset amortization

 

 

1,607

 

 

 

1,607

 

 

 

4,768

 

 

 

2,532

 

Total operating expenses

 

 

119,914

 

 

 

59,258

 

 

 

332,621

 

 

 

145,547

 

Loss from operations

 

 

(62,120

)

 

 

(42,412

)

 

 

(133,551

)

 

 

(119,881

)

Interest expense, net

 

 

(757

)

 

 

(2,411

)

 

 

(5,751

)

 

 

(6,012

)

Loss before income taxes

 

 

(62,877

)

 

 

(44,823

)

 

 

(139,302

)

 

 

(125,893

)

Income tax benefit (expense)

 

 

678

 

 

 

 

 

 

(1,285

)

 

 

 

Net loss

 

$

(62,199

)

 

$

(44,823

)

 

$

(140,587

)

 

$

(125,893

)

Net loss per common share, basic and diluted

 

$

(1.32

)

 

$

(1.07

)

 

$

(3.14

)

 

$

(3.17

)

Weighted average common shares outstanding, basic and diluted

 

 

47,117,196

 

 

 

41,704,362

 

 

 

44,783,380

 

 

 

39,715,261

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

5


Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(In thousands, except for share amounts)

 

 

 

Common stock

 

 

Additional

 

 

Accumulated

 

 

Total
stockholders’

 

 

 

Shares

 

 

Amount

 

 

paid-in capital

 

 

deficit

 

 

equity

 

Balance at December 31, 2021

 

 

37,816,794

 

 

$

4

 

 

$

424,826

 

 

$

(409,199

)

 

$

15,631

 

Stock-based compensation

 

 

 

 

 

 

 

 

7,598

 

 

 

 

 

 

7,598

 

Issuance of common stock upon exercise of options

 

 

18,015

 

 

 

 

 

 

182

 

 

 

 

 

 

182

 

Issuance of common stock upon vesting of RSUs

 

 

4,555

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon financing

 

 

1,044,081

 

 

 

 

 

 

31,008

 

 

 

 

 

 

31,008

 

Shares tendered for withholding taxes

 

 

 

 

 

 

 

 

(89

)

 

 

 

 

 

(89

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(39,632

)

 

 

(39,632

)

Balance at March 31, 2022

 

 

38,883,445

 

 

 

4

 

 

 

463,525

 

 

 

(448,831

)

 

 

14,698

 

Stock-based compensation

 

 

 

 

 

 

 

 

10,162

 

 

 

 

 

 

10,162

 

Issuance of common stock upon exercise of options

 

 

6,691

 

 

 

 

 

 

176

 

 

 

 

 

 

176

 

Issuance of common stock upon vesting of RSUs

 

 

1,122

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon financing

 

 

1,023,153

 

 

 

 

 

 

30,795

 

 

 

 

 

 

30,795

 

Issuance of warrants upon debt financing

 

 

 

 

 

 

 

 

826

 

 

 

 

 

 

826

 

Shares tendered for withholding taxes

 

 

 

 

 

 

 

 

(19

)

 

 

 

 

 

(19

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(41,439

)

 

 

(41,439

)

Balance at June 30, 2022

 

 

39,914,411

 

 

 

4

 

 

 

505,465

 

 

 

(490,270

)

 

 

15,199

 

Stock-based compensation

 

 

 

 

 

 

 

 

9,198

 

 

 

 

 

 

9,198

 

Issuance of common stock upon exercise of options

 

 

246,665

 

 

 

 

 

 

3,064

 

 

 

 

 

 

3,064

 

Issuance of common stock upon vesting of RSUs

 

 

11,405

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon financing

 

 

3,253,226

 

 

 

 

 

 

174,985

 

 

 

 

 

 

174,985

 

Shares tendered for withholding taxes

 

 

 

 

 

 

 

 

(262

)

 

 

 

 

 

(262

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(44,823

)

 

 

(44,823

)

Balance at September 30, 2022

 

 

43,425,707

 

 

$

4

 

 

$

692,450

 

 

$

(535,093

)

 

$

157,361

 

Balance at December 31, 2022

 

 

43,498,617

 

 

 

4

 

 

 

705,885

 

 

 

(596,333

)

 

 

109,556

 

Stock-based compensation

 

 

 

 

 

 

 

 

12,943

 

 

 

 

 

 

12,943

 

Issuance of common stock upon exercise of options

 

 

28,876

 

 

 

 

 

 

387

 

 

 

 

 

 

387

 

Issuance of common stock upon vesting of RSUs

 

 

20,973

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of warrants upon debt financing

 

 

 

 

 

 

 

 

1,011

 

 

 

 

 

 

1,011

 

Shares tendered for withholding taxes

 

 

 

 

 

 

 

 

(867

)

 

 

 

 

 

(867

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(11,218

)

 

 

(11,218

)

Balance at March 31, 2023

 

 

43,548,466

 

 

 

4

 

 

 

719,359

 

 

 

(607,551

)

 

 

111,812

 

Stock-based compensation

 

 

 

 

 

 

 

 

15,922

 

 

 

 

 

 

15,922

 

Issuance of common stock upon exercise of options

 

 

169,998

 

 

 

0

 

 

 

6,570

 

 

 

 

 

 

6,570

 

Issuance of common stock upon vesting of RSUs

 

 

8,330

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon financing

 

 

3,000,000

 

 

 

0

 

 

 

211,378

 

 

 

 

 

 

211,378

 

Issuance of warrants upon debt financing

 

 

 

 

 

 

 

 

624

 

 

 

 

 

 

624

 

Shares tendered for withholding taxes

 

 

 

 

 

 

 

 

(333

)

 

 

 

 

 

(333

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(67,170

)

 

 

(67,170

)

Balance at June 30, 2023

 

 

46,726,794

 

 

 

5

 

 

 

953,520

 

 

 

(674,721

)

 

 

278,804

 

Stock-based compensation

 

 

 

 

 

 

 

 

17,237

 

 

 

 

 

 

17,237

 

Issuance of common stock upon exercise of options

 

 

131,512

 

 

 

 

 

 

4,317

 

 

 

 

 

 

4,317

 

Issuance of common stock upon vesting of RSUs

 

 

9,075

 

 

 

 

 

 

 

 

 

 

 

 

 

Issuance of common stock upon financing

 

 

450,000

 

 

 

 

 

 

31,704

 

 

 

 

 

 

31,704

 

Shares tendered for withholding taxes

 

 

 

 

 

 

 

 

(355

)

 

 

 

 

 

(355

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

(62,199

)

 

 

(62,199

)

Balance at September 30, 2023

 

 

47,317,381

 

 

$

5

 

 

$

1,006,423

 

 

$

(736,920

)

 

$

269,508

 

 

The accompanying notes are an integral part of the consolidated financial statements.

6


Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)

 

 

 

Nine Months Ended September 30,

 

 

 

2023

 

 

2022

 

Cash flows from operating activities

 

 

 

 

 

 

Net loss

 

$

(140,587

)

 

$

(125,894

)

Adjustments to reconcile net loss to net cash used in operating activities:

 

 

 

 

 

 

Stock-based compensation expense

 

 

43,705

 

 

 

26,958

 

Amortization of intangible asset

 

 

4,768

 

 

 

2,532

 

Amortization of debt discount

 

 

2,120

 

 

 

1,137

 

Depreciation

 

 

326

 

 

 

178

 

Loss (gain) in fair value of contingent consideration

 

 

5,711

 

 

 

(902

)

Non-cash lease expense

 

 

1,115

 

 

 

836

 

Change in operating lease liability

 

 

(59

)

 

 

(765

)

Changes in operating assets and liabilities:

 

 

 

 

 

 

Accounts receivable, net

 

 

(40,716

)

 

 

(20,302

)

Inventories, net

 

 

(3,268

)

 

 

(9

)

Prepaid expenses and other current assets

 

 

(4,018

)

 

 

(2,412

)

Non-current inventory and other assets

 

 

601

 

 

 

(727

)

Accounts payable

 

 

(9,507

)

 

 

(305

)

Accrued expenses and other current liabilities

 

 

25,091

 

 

 

30,727

 

Net cash used in operating activities

 

 

(114,718

)

 

 

(88,948

)

Cash flows from investing activities

 

 

 

 

 

 

Purchases of equipment

 

 

(575

)

 

 

(521

)

Cash paid for business combination

 

 

 

 

 

(53,000

)

Net cash used in investing activities

 

 

(575

)

 

 

(53,521

)

Cash flows from financing activities

 

 

 

 

 

 

Proceeds from draw down of debt

 

 

85,000

 

 

 

45,000

 

Payment of debt issuance costs

 

 

(2,297

)

 

 

(487

)

Proceeds from issuance of common stock upon financing

 

 

258,750

 

 

 

243,763

 

Cash paid for common stock issuance costs

 

 

(15,668

)

 

 

(6,975

)

Proceeds from issuance of common stock upon exercise of options

 

 

11,274

 

 

 

3,422

 

Payment of contingent consideration

 

 

(4,489

)

 

 

(838

)

Payments of tax withholdings on stock award

 

 

(1,555

)

 

 

(369

)

Net cash provided by financing activities

 

 

331,015

 

 

 

283,516

 

Net increase in cash

 

 

215,722

 

 

 

141,047

 

Cash and cash equivalents at beginning of period

 

 

200,842

 

 

 

86,473

 

Cash and cash equivalents at end of period

 

$

416,564

 

 

$