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 June 30, 2023

☐ 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 47,190,970 shares of the registrant’s common stock, $0.0001 par value, outstanding as of July 31, 2023.

Table of Contents

AXSOME THERAPEUTICS, INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 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	31
ITEM 3	Quantitative and Qualitative Disclosure About Market Risk	44
ITEM 4	Controls and Procedures	44
PART II — OTHER INFORMATION
ITEM 1	Legal Proceedings	45
ITEM 1A	Risk Factors	45
ITEM 5	Other Information	96
ITEM 6	Exhibits	97
Signatures		98

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

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


	June 30,			December 31,
	2023			2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	437,113		$	200,842
Accounts receivables, net		67,410			37,699
Inventories, net		9,252			4,320
Prepaid and other current assets		5,911			2,781
Total current assets		519,686			245,642
Equipment, net		736			722
Right-of-use asset - operating lease		7,412			420
Goodwill		12,042			10,310
Intangible asset, net		56,500			59,661
Non-current inventory and other assets		15,262			14,721
Total assets	$	611,638		$	331,476
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	42,958		$	38,605
Accrued expenses and other current liabilities		65,324			51,631
Operating lease liability, current portion		350			425
Contingent consideration, current		6,342			5,900
Total current liabilities		114,974			96,561
Contingent consideration, non-current		33,500			31,100
Loan payable, long-term		176,820			94,259
Operating lease liability, long-term		7,540			—
Total liabilities		332,834			221,920
Stockholders’ equity:
Preferred stock, $0.0001 par value per share (10,000,000 shares authorized, none issued and outstanding at June 30, 2023 and December 31, 2022, respectively)		—			—
Common stock, $0.0001 par value per share (150,000,000 shares authorized, 46,726,794 and 43,498,617 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively)		5			4
Additional paid-in capital		953,520			705,885
Accumulated deficit		(674,721	)		(596,333	)
Total stockholders’ equity		278,804			109,556
Total liabilities and stockholders’ equity	$	611,638		$	331,476

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

Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statements of Operations (Unaudited)

(In thousands, except for per share amounts)


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2023			2022			2023			2022
Revenues:
Product sales, net	$	46,017		$	8,820		$	74,586		$	8,820
License revenue		—			—			65,735			—
Royalty revenue		683			—			955			—
Total Revenues		46,700			8,820			141,276			8,820
Operating expenses:
Cost of revenue (excluding amortization and depreciation)		4,599			983			12,155			983
Research and development		20,581			15,792			38,374			28,377
Selling, general and administrative		78,935			31,160			153,126			56,864
Loss (Gain) in fair value of contingent consideration		6,053			(860	)		5,891			(860	)
Intangible asset amortization		1,589			926			3,161			926
Total operating expenses		111,757			48,001			212,707			86,290
Loss from operations		(65,057	)		(39,181	)		(71,431	)		(77,470	)
Interest expense, net		(2,730	)		(2,257	)		(4,994	)		(3,601	)
Loss before income taxes		(67,787	)		(41,438	)		(76,425	)		(81,071	)
Income tax benefit (expense)		617			—			(1,963	)		—
Net loss	$	(67,170	)	$	(41,438	)	$	(78,388	)	$	(81,071	)
Net loss per common share, basic and diluted	$	(1.54	)	$	(1.06	)	$	(1.80	)	$	(2.09	)
Weighted average common shares outstanding, basic and diluted		43,669,820			39,081,100			43,597,131			38,704,227

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

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		—		—		—			(41,438	)		(41,438	)
Balance at June 30, 2022		39,914,411		4		505,465			(490,269	)		15,200
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		—		—		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

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

Table of Contents

Axsome Therapeutics, Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In thousands)


	Six Months Ended June 30,
	2023			2022
Cash flows from operating activities
Net loss	$	(78,388	)	$	(81,071	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		28,865			17,760
Amortization of intangible asset		3,161			926
Amortization of debt discount		1,493			683
Depreciation		190			104
Loss in fair value of contingent consideration		5,891			(860	)
Non-cash lease expense		772			554
Change in operating lease liability		(299	)		(473	)
Changes in operating assets and liabilities:
Accounts receivable, net		(29,711	)		(16,168	)
Inventories, net		(4,932	)		277
Prepaid expenses and other current assets		(3,130	)		(1,204	)
Non-current inventory and other assets		(541	)		(185	)
Accounts payable		4,353			6,282
Accrued expenses and other current liabilities		11,106			7,185
Net cash used in operating activities		(61,170	)		(66,190	)
Cash flows from investing activities
Purchases of equipment		(204	)		(455	)
Cash paid for business combination		—			(53,000	)
Net cash used in investing activities		(204	)		(53,455	)
Cash flows from financing activities
Proceeds from draw down of debt		85,000			45,000
Payment of debt issuance costs		(1,441	)		(487	)
Proceeds from issuance of common stock upon financing		225,000			63,560
Cash paid for common stock issuance costs		(13,622	)		(1,757	)
Proceeds from issuance of common stock upon exercise of options		6,957			358
Payment of contingent consideration		(3,049	)		—
Payments of tax withholdings on stock award		(1,200	)		(108	)
Net cash provided by financing activities		297,645			106,566
Net (decrease) increase in cash		236,271			(13,079	)
Cash and cash equivalents at beginning of period		200,842			86,473
Cash and cash equivalents at end of period	$	437,113		$	73,394
Supplemental disclosures of cash flow information:
Interest paid	$	7,132		$	2,586
Operating lease right-of-use asset obtained in exchange for operating lease liability		7,764			561
Supplemental non-cash investing activities:
Fair value of contingent consideration in a business combination		39,842