Analyst Conference Summary


Sage Therapeutics

conference date: November 5, 2020
for quarter ending: September 30, 2020 (third quarter, Q3)

Forward-looking statements

Overview: Not much revenue, but pipeline progress is noted.

Basic data (GAAP):

Revenue was $1.6 million, down from $3.6 million year-earlier.

net income was negative $106 million, up from negative $180 million year-earlier.

Earnings per Share (EPS) were negative $2.03, up from negative $3.48 year-earlier.


The cash balance at the end of 2020 should be at least $550 million, sufficient to support development into 2022.

Conference Highlights:

Mike Cloonan, COO, said "Today I am pleased to report that our clinical programs across three franchises remain on track, with a series of key milestones anticipated over the next 12 to 18 months. During the third quarter, we continued progress across our deep and robust clinical pipeline, a pipeline that spans multiple disease states with programs in early, mid and late stage development. The Sage team continues to execute well during the COVID-19 pandemic and remains determined to provide much needed options to patients suffering with debilitating brain health disorders."

Zuranolone for major depressive disorder Phase 3 (shoreline) interim results released in October 2020 showed good tolerance and safety. 70% achieved a response, 40% a remission. 30 mg dose data should be available in 1H 2021. Also testing at 50 mg and with repeat dosing. Zuranolone is a modulator of GABA-A receptors. Also being studied for postpartum depression, with topline data expected in 2021.

Zulresso (brexanolone) for postpartum depression royalty revenue was $1.6 million, up from $1.5 million year-earlier. The company plans to start a Phase 3 study for COVIC-19 realted acute respiratory distress in Q4 2020.

SAGE-324 is in an ongoing Phase 2 study for essential tremor, with topline data expected in Q1 2021.

SAGE-718 is in a Phase 2 open-label study for Parkinson's Disease cognitive dysfunction with topline data expected in Q1 2020. A second Phase 2 study for Alzheimer's cognitive dysfucntion and mild dementia is expected to start before year-end 2020. It is an NMDA modulator.

Cash and equivalents balance ended he quarter at $671 million, down sequentially from $759 million.

Cost of goods sold were $0.15 million. R&D expense was $74 million. Selling, general and administrative expense $35 millin. Restructuing costs $0.5 million. Total operating costs $109 million. Loss from operations $107million. Interest income $1 million.

Q&A summary:

Sage-718, what would be a meaningful change in CFFRS? Alzheimer's, Huntington's implications? NMDA modulator. We saw improvement in cognition in healthy volunteers, including with Huntington's patients. As is early days, we are looking for patient populations could have a potent response, using open label studies.

Possible restart of Redwood? Zuranolone has multiple parallel paths forward. We believe redwood results will be needed to file for episodic pathway.

Essential tremor program (324), are you looking to move forward with a 50% reduction? We are looking to see if we can replicate types of responses seen in open-label studies. A 30% to 50% reduction would be considered meaningful.

50mg patients needing to move down to 40mg? Tolerability is similar at both doses, just a bit higher rates at the higher dose. Waterfall data is blinded, so we can't talk about it much at this point.

R&D spending plan for 2021? We have been managing cash burn. We just began several studies, so it will ramp in 2021.

Essential tremor 324 vs. 217 issues? Both molecules are GABA, but we crafted different pharmakinetics for 324 for chronic dosing. But it still we have sedation adverse effects, we expect.

904 move to clinic? NMDA TAM like 718. 904 is in phase 1 single ascending dose.

The fundamental result of zuanolone Shoreline was majority of patients did not need more than one or two doses during the course of the year.

We have seen tremor in a variety of trials, but mild to moderate in very few patients. We think the benefit/risk profile is good, including better than other drugs used to treat these patients.

Zuranolone loss of consciousness? We are not seeing that in that program. We are seeing consistent safety data.

Zuranolone appears to treat the disease without becoming a lifestyle (requiring continous dosing).

Shionogi collaboration, other potential collaborations? Phase 2 program in Japan for Zoranolone, where they have the rights. If we can accelerate with business development, including entering new market access, we are interested.

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Disclaimer: My analyst call summaries may include both condensations of statements made by company representatives and my own analysis. They are not covered by any warranty. I cannot guarantee anything said by company representatives is true. I try not to make errors, but it is possible. These are my personal notes which I share with other investors and which I use as the basis of my blog and Seeking Alpha articles.

Copyright 2020 William P. Meyers