AXSM - Axsome: An Overview Of Auvelity; A New Alternative Therapy For Major Depressive Disorder

Summary

• Major Depressive Disorder (MDD) affects millions of people globally, with many still experiencing persistent symptoms despite current treatments.
• Auvelity, a combination of dextromethorphan and bupropion developed by Axsome Therapeutics, is attracting attention as an alternative therapy for MDD.
• Auvelity faces several obstacles in the market, such as competition from established treatments, preexisting failure for treatment-resistant depression, and a rigid industry hierarchy.
• For Axsome to succeed, they must prioritize effective communication of Auvelity's benefits, establish key partnerships, invest in ongoing research, and protect their intellectual property through patents and legal measures.
• Axsome is a "Hold" until the company's financial performance can be accurately evaluated through the release of revenue data and the acquisition of valid and comprehensive patents that protect their intellectual property in the market.

Introduction

Depression is a widespread and challenging condition affecting millions of people globally. Despite the numerous treatments available, many individuals still experience persistent symptoms, leading to the exploration of alternative therapies. Auvelity , a combination of dextromethorphan and bupropion developed by Axsome Therapeutics (AXSM), is one such alternative therapy gaining attention in the search for better options for Major Depressive Disorder ((MDD)).

The following article will focus on Auvelity's potential role in the treatment for MDD, as well as Axsome's patents for Auvelity.

Financials

Before we begin, let's review the company's latest financials . Axsome Therapeutics reported its financial results for Q3 2022. Total revenue for the quarter was $16.8 million, driven by US sales of its drug, Sunosi. Total cost of product sales was $1.9 million and R&D expenses were $14.9 million, both increased from the previous year. SG&A expenses increased significantly from $20.2 million to $40.9 million, mainly due to commercial activities for Sunosi and Auvelity. The company reported a net loss of $44.8 million, an increase from the previous year, and had a cash balance of $227.5 million at the end of the quarter. This should be sufficient cash runway into late 2024. At writing (February 8, 2023), Axsome is valued at $2.86 billion with $94 million in total debt.

Major Depressive Disorder Treatment Options

The market for depression treatments is jam-packed, confusing and extremely competitive, with plenty of pharmaceutical options available. However, many patients are still struggling with their symptoms, which is why new treatments are being developed and explored.

Pharmacological treatment recommendations for Major Depressive Disorder ((MDD)) typically follow a hierarchical approach, starting with first-line treatments and escalating to more specialized or potent interventions as needed.

For MDD, first-line treatments usually consist of selective serotonin reuptake inhibitors (SSRIs). These medications work by enhancing the availability of serotonin in the brain, which play a role in regulating mood and emotions. Examples of SSRIs include fluoxetine (Prozac), paroxetine (Paxil), and sertraline (Zoloft).

If SSRIs are not effective, clinicians often turn to SNRIs, such as venlafaxine (Effexor) and duloxetine (Cymbalta), as second-line treatments . This recommendation is based on guidelines from UpToDate , a widely used resource among healthcare providers.

If a second-line treatment is not adequate, other options may be considered. These may include atypical antidepressants, such as mirtazapine (Remeron) or bupropion (Wellbutrin), which have a different mechanism of action than SSRIs or SNRIs. Axsome Therapeutic's Auvelity falls into this category.

Due to toxicity/side effects, tricyclic antidepressants and MAOIs are often utilized as a last resort.

It is important to note that the hierarchical approach to treating MDD is not absolute, and different patients may respond better to different treatments.

Auvelity - How it Works and What Makes it Different

Dextromethorphan is a noncompetitive N-methyl-d-aspartate (NMDA) receptor antagonist, which means it works by blocking the NMDA receptors in the brain. This mechanism of action is believed to improve depressive symptoms. Bupropion, on the other hand, is a norepinephrine-dopamine reuptake inhibitor and is thought to enhance the effect of dextromethorphan in treating MDD.

A clinical trial was conducted with 327 participants, divided into two groups. One group was given dextromethorphan-bupropion and the other was given a placebo. The baseline scores for the depression assessment test, called the MADRS, were similar for both groups. However, at the end of 6 weeks, the group taking dextromethorphan-bupropion showed a significantly greater improvement in depression symptoms compared to the placebo group, with a difference of -3.87 points on the MADRS score. This superiority was observed as early as the first and second weeks and continued throughout the trial. Additionally, a higher percentage of patients in the dextromethorphan-bupropion group achieved remission (39.5%) and clinical response (54.0%) compared to the placebo group (17.3% and 34.0%, respectively). The secondary endpoints also favored the dextromethorphan-bupropion group.

The most commonly reported side effects in the clinical trial were dizziness, nausea, headache, somnolence, and dry mouth. No serious adverse effects such as psychotomimetic symptoms, weight gain, or increased sexual dysfunction were observed in the dextromethorphan-bupropion group - providing therapeutic differentiation between many existing drugs for MDD (e.g. SSRIs).

Risks to Auvelity

MDD is a crowded, complex market with established drugs

Despite these positive results, Auvelity has a lot of challenges to overcome in this crowded market. There are many established pharmaceutical companies already dominating this market, and new entrants like Auvelity may struggle to gain a foothold. The high cost of developing and bringing a new drug to market and the strict regulatory requirements may also be a barrier to adoption.

Auvelity's prior failure in treatment-resistant depression is more relevant than meets the eye

The relevance of Auvelity's failure in treating treatment-resistant depression remains significant in the MDD market, as its potential use is intended for third-line treatment for the majority of cases. The definition of treatment-resistant depression can vary based on the criteria used by healthcare professionals or researchers, but commonly includes failing to respond to two trials of different antidepressants or failing to respond to one trial of an antidepressant and one trial of a different treatment such as psychotherapy or electroconvulsive therapy. Despite its broad label and, thus, ability to be used as first or second-line treatment, Auvelity is likely to be used as a third-line option for patients who have failed two prior treatments. However, Auvelity did not outperform its competitor, Bupropion, in a trial for patients with a history of inadequate response to one or two prior antidepressant treatments.

Auvelity's patents must be rock-solid due to lack of new chemical entity and/or orphan designations that aid to protect intellectual property

Axsome Therapeutics could still potentially obtain several types of patents to establish market exclusivity for their combination drug for MDD. These patents could include:

1. Composition of Matter Patent: This type of patent covers the unique chemical structure of the combination drug and provides protection for the drug itself. A Composition of Matter, or COM, patent gives the company the exclusive right to make, use, and sell the drug for the term of the patent (typically 20 years from the date of filing). Currently, Axsome does not own a COM patent for Auvelity. However, they have a COM patent pending. The pending patent relates to enantiomerically enriched ((S))-bupropion or ((R))-bupropion, and their use in the form of dosage forms to treat conditions and/or achieve specific pharmacokinetic parameters and enhance dextromethorphan plasma levels. This type of patent offers protection for the specific chemical composition and its use, and can help the patent holder maintain market exclusivity and deter generic competition.
2. Method of Use Patent: This type of patent covers the specific use of the combination drug for treating MDD. A method of use patent provides the company with the exclusive right to prevent others from using the combination drug for the treatment of MDD for the term of the patent. One such patent Axsome was granted, expiring 2034-11-05, involves the proprietary use of bupropion as a modulator of drug activity. Method of Use Patents can provide protection for a limited period of time, typically 20 years from the date of filing. However, the length of time that a Method of Use Patent can prevent generic entry into the market will depend on a variety of factors, such as the regulatory approval process, the duration of time it takes for the patent to be granted, and the time it takes for generic drug manufacturers to develop and bring their own products to market. In some cases, Method of Use Patents can be an effective way for drug manufacturers to prevent generic competition and maintain market exclusivity for a period of time. However, it's important to note that these patents can be challenged in court and may not provide complete protection against generic competition.
3. Manufacturing Patent: This patent covers the methodology used to manufacture the combination drug and grants the company exclusive rights to produce the drug using the patented process, while also preventing others from using the same process. However, my research did not uncover any substantial manufacturing patent that would provide substantial protection for Axsome.

By obtaining these patents, Axsome can establish market exclusivity for their combination drug and prevent generic competitors from producing and selling generic versions of the drug. The specific term of protection provided by these patents will depend on the jurisdiction in which the patents are granted, as well as the specific terms of the patents themselves. Typically, patents in the United States and Europe provide 20 years of protection from the date of filing, but this can vary depending on the specifics of each case.

Below are three examples of drugs that are combinations of generic substances and how their manufacturers used patents to protect against generic competition:

1. Suboxone is a combination of the generic drugs buprenorphine and naloxone and is used to treat opioid dependence. Its manufacturer, Reckitt Benckiser, has used patents on the combination drug and its manufacturing process, as well as other strategies such as reformulating the drug, to maintain market exclusivity and prevent generic competition.

2. Januvia (sitagliptin) is a combination of the generic drugs sitagliptin and metformin used to treat type 2 diabetes. Its manufacturer, Merck & Co., has used patents on the combination drug and its manufacturing process, as well as other strategies such as reformulating the drug, to maintain market exclusivity and prevent generic competition.

3. Crestor (rosuvastatin) is a combination of the generic drug rosuvastatin and a proprietary chemical that enhances its bioavailability. Its manufacturer, AstraZeneca (AZN), has used patents on the combination drug and its manufacturing process, as well as other strategies such as reformulating the drug, to maintain market exclusivity and prevent generic competition.

In all three examples, the companies have been able to successfully maintain market exclusivity for their combination drugs by using patents on the combination drug and its manufacturing process, as well as other strategies such as reformulating the drug, even when one or both components are available as generic drugs. However, the success of using patents to ward off generic competition will depend on the specific circumstances of each case.

Conclusion

In conclusion, Auvelity has been proven to be an effective treatment option for depression through clinical trials and studies. Despite facing several obstacles in the market, such as competition from established treatments, preexisting failure for treatment-resistant depression, and a rigid industry hierarchy, its unique mechanism of action and therapeutic differentiation (e.g. quick onset, lack of sexual side effects, etc.) set it apart and has potential to attract those who have not responded to traditional treatments.

For Axsome Therapeutics to succeed, they must prioritize effective communication of Auvelity's benefits, establish key partnerships, invest in ongoing research, and protect their intellectual property through patents and legal measures.

The recommendation for Axsome Therapeutics is "Hold" until the company's financial performance can be accurately evaluated through the release of revenue data and the acquisition of valid and comprehensive patents that protect their intellectual property in the market.

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