Analyst Conference Summary

biotechnology

conference date: August 3, 2021 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2021 (second quarter, Q2)

Forward-looking statements

Overview: Good data from latest zuranolone trial.

Basic data (GAAP):

Revenue was $2 million, flat sequentially from $2 million, and up from $1 million year-earlier.

Net income was negative $107 million, down sequentially from negative $96 million, and up from negative $136 million year-earlier.

Earnings per Share (EPS) were negative $1.85, down sequentially from negative $1.64, and up from negative $2.63 year-earlier.

Guidance:

Expects end-of-2021 cash over $1.7 billion.

Conference Highlights:

Barry Greene, CEO, said "Sage has made incredible progress on our mission to become the leader in brain health in the first half of 2021, setting us up for multiple near-mid and long-term catalysts. Our goal of making medicines that matter for people with brain health disorders is more important than ever, and we are committed to delivering innovative therapies. The programs for zuranolone are examples of Sage's unique approach to designing integrated clinical development strategies that we believe will enable us to bring paradigm shifting treatments to market and address the greatest unmet needs for patients. I look forward to providing further updates on zuranolone and the rest of Sage's robust pipeline in the second half of the year." Planning to discuss an NDA package with the FDA, with a update on filing timeline possible later this year.

In Q2 2021, with Biogen, Sage announced positive Waterfall Phase 3 ziranolone for major depressive disorder. Dosing over 14 days at 50 mg showed an 86% improvement in their HAMD-17 score 4 weeks after dosing ended. Result was statistically significant. Most side effects of other anti-depressants were not seen. Next steps will be discussed with the FDA.

More zuranolone data from the Coral, Shoreline, and skylark studies are expected in 2021 and 2022.

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. The Redwood and Rainforest studies, previously suspended, are now terminated as uneccessary.

Zulresso (brexanolone) for postpartum depression royalty revenue was $ million, down from $ 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 in April 2021. 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. A Phase 2 placebo-controlled study for essential termor is planned for late in 2021.

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 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 $1.91 billion, down sequentially from $2.0 billion.

Cost of goods sold were $0 million. R&D expense was $66 million. Selling, general and administrative expense $43 million. Restructuing costs $0 million. Total operating costs $110 million. Income from operations negative $108 million. Interest income $1 million.

Q&A summary:

Essential tremor efficacy with good safety gave us confidence, with Biogen, to design a dose frequency study, which, if it works out, would allow us to move to Phase 3. We are moving forward rapidly.

Waterfall data, feedback from KOLs? We have had great discussions. Everyone is seeing a paradigm shift. Nobody has seen an oral medicine that works at day 3, with continued efficacy. The profile of zuranolone is unique. Older depressents require 6 months of dosing. Z. requires just 14 days. It is all about the benefit risk profile. Most patients require only 4 weeks of medicine over the course of a year. We are looking at how to educate physicians to get them to change their practice.

Timeline for Z. vs. Coral data? The efficacy data we have to date are sufficient for an efficacy filing. We need pharmacology studies for the 50 mg dose, which should be complete by year end. It is conceivable that we will file the regulatory package before getting all the Phase 3 data. We should have all the data we need to file, it is just a matter of technical aspects of what goes into the filing.

Discontinued Rainforest, comorbid insomnia? In completed studies we have insight into sleep architecture, and sufficent data to show sleep patterns have been improved.

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