Analyst Conference Summary

biotechnology

conference date: May 4, 2021
for quarter ending: March 31, 2021 (first quarter, Q1)

Forward-looking statements

Overview: Data due in 2021 could have a significant impact.

Basic data (GAAP):

Revenue was $2 million, down sequentially from $1.1 billion, and flat from $2 million year-earlier.

Net income was negative $96 million, down sequentially from $975 million, and up from negative $127 million year-earlier.

Earnings per Share (EPS) were negative $1.64, down sequentially from $18.19, and up from negative $2.44 year-earlier.

Guidance:

Conference Highlights:

Barry Greene, CEO, said "Sage started 2021 with significant advances across our depression, neurology and neuropsychiatry franchises, and the progress we’ve made so far this year sets us up for near-, medium- and long-term value creation opportunities as we further advance our deep organic pipeline. In the first quarter alone, we demonstrated the significant potential of our innovative development-stage therapeutics that modulate the GABA and NMDA pathways, through the positive clinical data demonstrated in studies of zuranolone, SAGE-324 and now SAGE-718. We are making great progress toward our goal of becoming the leading brain health company and a top-tier biopharmaceutical company, with multiple upcoming catalysts that I believe represent important steps on our mission of delivering medicines that matter to address the ongoing crisis in brain health."

In March 2021, Zuranolone complete, positive topline 12-month data was reported from the 30 mg cohort and interim topline data from the 50 mg cohort of the ongoing Phase 3 open-label SHORELINE Study. Shoreline study is ongoing, and Sage plans to reopen enrollment in the 50 mg cohort of the open-label SHORELINE Study, increasing the target enrollment to 500 patients. Additionally, the Company plans to offer patients from the CORAL Study the ability to roll-over into the SHORELINE Study following completion of the CORAL Study. Also being studied for postpartum depression, with topline data expected in 2021. Waterfall Phase 3 study has closed enrollment with 30mg data due 1H 2021, 50mg in late 2021. The Skylark post-partum depression Phase 3 study should report results in late 2021.

Zulresso (brexanolone) for postpartum depression royalty revenue was $1.6 million, down from $2.3 million year-earlier. A Phase 3 study for COVIC-19 realted acute respiratory distress is enrolling.

SAGE-324 reported positive data in the Phase 2 study for essential tremor. No serious adverse events, but tremor reduction over entire time period, and was statistically significant. Also in Phase 1 trials for Parkinson's and epileptiform (epilepsy) disorders.

SAGE-718 is in a Phase 2a open-label study for Huntington's Disease cognitive dysfunction reported positive data in Q1 2021. A second Phase 2 study for Alzheimer's cognitive dysfucntion and mild dementia is expected to start before year-end 2021. A Phase 2 placebo controlled trail for Huntington's is on track to start in 2021. It is an NMDA modulator.

Phase 1 study for SAGE-689 for acute GABA hypofunction data expected to complete in 2021.

Phase 1 study of SAGE-904 for NMDA hypofuction expected to complete in 2021.

SAGE-319: is an oral, extrasynaptic GABAA receptor preferring PAM that Sage plans to study for potential use in disorders of social interaction, being advanced into preclinical studies.

SAGE-421: is an oral, NMDA receptor PAM that Sage plans to study for potential use in neurodevelopmental disorders and cognitive recovery and rehabilitation, being advanced into preclinical studies.

Sage initiated a Phase 3 trial of brexanolone in patients with advanced COVID-19 related acute respiratory distress syndrome in Q42020 under the Coronavirus Treatment Acceleration Program (CTAP). Topline data expected in 2021.

Sage entered a collaboration agreement with Biogen in November 2020. They will jointly develop SAGE-217 (zuranolone) for depressive disorders and SAGE-324 for essential tremor. Could be worth $3.1 billion, received $1.5 billion at closing including $875 million upfront, $650 million equity investment. Potential milestone payments are $1.6 billion. Joint commercialization in U.S., Biogen commercializes outside the U.S.

Cash and equivalents balance ended he quarter at $2.0 billion, down sequentially from $2.1 billion.

Cost of goods sold were $0 million. R&D expense was $58 million. Selling, general and administrative expense $40 million. Restructuing costs $0 million. Total operating costs $98 million. Income from operations negative $97 million. Interest income $1 million.

Q&A summary:

718 additional 4 week cohort? Looking to learn more about a longer dosing interval.

Acceptable sedation and somnolence in Waterfall zuranolone trial? Not so much the number of adverse events, but whether patients will stay on the drug. We are confident in the profile, which is unique in its benefits and safety. Somnolence is sometimes desirable for depression patients. The numbers we are reporting are better than drugs currently in use.

More than 70% of patients need 2 or less treatments per year with zuranolone.

Shoreline 500 patient expansion, cause for, regulators? We wanted to roll CORAL patients into more dosing if they wanted it. The ongoing study will continue to provide useful information. There was no regulatory request for this.

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