SEC Filing | Axsome Therapeutics, Inc.

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10-Q

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, 2022

☐ 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.)

22 Cortlandt Street
16th 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 43,426,162 shares of the registrant’s common stock, $0.0001 par value, outstanding as of October 31, 2022.

Table of Contents

AXSOME THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2022

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	31
ITEM 3	Quantitative and Qualitative Disclosure About Market Risk	43
ITEM 4	Controls and Procedures	43
PART II — OTHER INFORMATION
ITEM 1	Legal Proceedings	44
ITEM 1A	Risk Factors	44
ITEM 6	Exhibits	98
Signatures		99

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.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Axsome Therapeutics, Inc.

Consolidated Balance Sheets


	September 30,			December 31,
	2022			2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	227,520,218		$	86,472,854
Accounts receivables, net		20,302,222			—
Inventories, net		2,103,477			—
Prepaid and other current assets		2,457,513			45,286
Total current assets		252,383,430			86,518,140
Equipment, net		626,990			283,846
Right-of-use asset - operating lease		384,568			660,162
Goodwill		11,897,000			—
Intangible asset, net		61,267,561			—
Non-current inventory and other assets		12,398,220			322,910
Total assets	$	338,957,769		$	87,785,058
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	12,844,629		$	13,149,329
Accrued expenses and other current liabilities		40,021,759			9,295,180
Operating lease liability, current portion		416,876			620,675
Contingent consideration, current		7,000,000			—
Total current liabilities		60,283,264			23,065,184
Contingent consideration, non-current		27,400,000			—
Loan payable, long-term		93,913,159			49,089,522
Total liabilities		181,596,423			72,154,706
Stockholders’ equity:
Preferred stock, $0.0001 par value per share (10,000,000 shares authorized, none issued and outstanding at September 30, 2022 and December 31, 2021, respectively)		—			—
Common stock, $0.0001 par value per share (150,000,000 shares authorized, 43,425,707 and 37,816,794 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively)		4,342			3,782
Additional paid-in capital		692,450,128			424,825,655
Accumulated deficit		(535,093,124	)		(409,199,085	)
Total stockholders’ equity		157,361,346			15,630,352
Total liabilities and stockholders’ equity	$	338,957,769		$	87,785,058

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

Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statetements of Operations

(Unaudited)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenues:
Product sales, net	$	16,845,792		$	—		$	25,665,578		$	—
Operating expenses:
Cost of product sales (excluding amortization and depreciation)		1,923,831			—			2,906,667			—
Research and development		14,877,021			13,180,258			43,254,364			44,279,272
Selling, general and administrative		40,892,443			20,226,884			97,756,314			47,819,618
Gain in fair value of contingent consideration		(42,120	)		—			(902,120	)		—
Intangible asset amortization		1,606,789			—			2,532,439			—
Total operating expenses		59,257,964			33,407,142			145,547,664			92,098,890
Loss from operations		(42,412,172	)		(33,407,142	)		(119,882,086	)		(92,098,890	)
Interest expense, net		(2,411,040	)		(1,475,535	)		(6,011,953	)		(4,327,966	)
Net loss	$	(44,823,212	)	$	(34,882,677	)	$	(125,894,039	)	$	(96,426,856	)
Net loss per common share, basic and diluted	$	(1.07	)	$	(0.93	)	$	(3.17	)	$	(2.57	)
Weighted average common shares outstanding, basic and diluted		41,704,362			37,680,966			39,715,261			37,569,416

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

Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statements of Stockholders’ Equity

(Unaudited)


	Common stock				Additional			Accumulated			Total stockholders’
	Shares		Amount		paid-in capital			deficit			equity
Balance at December 31, 2020		37,374,088		3,737		392,585,265			(278,796,093	)		113,792,909
Stock-based compensation		—		—		3,731,097			—			3,731,097
Issuance of common stock upon exercise of options		94,000		10		1,913,289			—			1,913,299
Issuance of common stock upon vesting of RSUs		1,917		—		—			—			—
Issuance of common stock upon financing		93,877		9		6,115,855			—			6,115,864
Net loss		—		—		—			(29,259,970	)		(29,259,970	)
Balance at March 31, 2021		37,563,882		3,756		404,345,506			(308,056,063	)		96,293,199
Stock-based compensation		—		—		5,456,242			—			5,456,242
Issuance of common stock upon exercise of options		68,503		7		958,888			—			958,895
Issuance of common stock upon vesting of RSUs		144		—		—			—			—
Issuance of warrants upon debt financing		—		—		—			—			—
Issuance of common stock upon financing		16,419		2		1,096,501			—			1,096,503
Shares tendered for withholding taxes		—		—		(84,010	)					(84,010	)
Net loss		—		—		—			(32,284,209	)		(32,284,209	)
Balance at June 30, 2021		37,648,948		3,765		411,773,127			(340,340,272	)		71,436,620
Stock-based compensation		—		—		5,725,217			—			5,725,217
Issuance of common stock upon exercise of options		35,618		3		438,680			—			438,683
Issuance of common stock upon vesting of RSUs		3,317		1		—			—			1
Net loss		—		—		—			(34,882,677	)		(34,882,677	)
Balance at September 30, 2021		37,687,883	$	3,769	$	417,937,024		$	(375,222,949	)	$	42,717,844
Balance at December 31, 2021		37,816,794		3,782		424,825,655			(409,199,085	)		15,630,352
Stock-based compensation		—		—		7,598,329			—			7,598,329
Issuance of common stock upon exercise of options		18,015		2		181,635			—			181,637
Issuance of common stock upon vesting of RSUs		4,555		—		—			—			—
Issuance of common stock upon financing		1,044,081		104		31,008,497			—			31,008,601
Shares tendered for withholding taxes		—		—		(88,594	)		—			(88,594	)
Net loss		—		—		—			(39,632,311	)		(39,632,311	)
Balance at March 31, 2022		38,883,445		3,888		463,525,522			(448,831,396	)		14,698,014
Stock-based compensation		—		—		10,161,678			—			10,161,678
Issuance of common stock upon exercise of options		6,691		—		176,412			—			176,412
Issuance of common stock upon vesting of RSUs		1,122		—		—			—			—
Issuance of common stock upon financing		1,023,153		103		30,794,544			—			30,794,647
Issuance of warrants upon debt financing		—		—		826,153			—			826,153
Shares tendered for withholding taxes		—		—		(18,926	)		—			(18,926	)
Net loss		—		—		—			(41,438,516	)		(41,438,516	)
Balance at June 30, 2022		39,914,411		3,991		505,465,383			(490,269,912	)		15,199,462
Stock-based compensation		—		—		9,197,661			—			9,197,661
Issuance of common stock upon exercise of options		246,665		25		3,064,236			—			3,064,261
Issuance of common stock upon vesting of RSUs		11,405		1		—			—			1
Issuance of common stock upon financing		3,253,226		325		174,984,483			—			174,984,808
Shares tendered for withholding taxes		—		—		(261,635	)		—			(261,635	)
Net loss		—		—		—			(44,823,212	)		(44,823,212	)
Balance at September 30, 2022		43,425,707	$	4,342	$	692,450,128		$	(535,093,124	)	$	157,361,346

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

Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statements of Cash Flows

(Unaudited)


	Nine Months Ended September 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(125,894,039	)	$	(96,426,856	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		26,957,668			14,912,556
Amortization of intangible asset		2,532,439			—
Amortization of debt discount		1,136,951			851,862
Depreciation		178,107			45,305
Gain in fair value of contingent consideration		(902,120	)		—
Amortization of operating lease right-of-use asset		836,974			802,949
Change in operating lease liability		(765,179	)		(922,179	)
Changes in operating assets and liabilities:
Accounts receivable, net		(20,302,222	)		—
Inventories, net		(8,600	)		—
Prepaid expenses and other current assets		(2,412,227	)		(252,929	)
Non-current inventory and other assets		(727,187	)		(5,535	)
Accounts payable		(304,700	)		(122,341	)
Accrued expenses and other current liabilities		30,726,579			1,731,923
Net cash used in operating activities		(88,947,556	)		(79,385,245	)
Cash flows from investing activities
Purchases of equipment		(521,251	)		(307,549	)
Cash paid for business combination		(53,000,000	)