Analyst Conference Summary


Sage Therapeutics

conference date: November 2, 2021 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2021 (third quarter, Q3)

Forward-looking statements

Overview: Continues pipeline development, plans to file for zuranolone.

Basic data (GAAP):

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

Net income was negative $130 million, down sequentially from negative $107 million, and up from negative $108 million year-earlier.

Earnings per Share (EPS) were negative $2.21, down sequentially from negative $1.85, and down from negative $2.03 year-earlier.


Cash should end 2021 over $1.7 billion.

Conference Highlights:

Barry Greene, CEO, said "I'm proud of the substantial progress we have made this quarter, including a successful pre-NDA meeting with the FDA for zuranolone. We are excited to have reached alignment with the Agency and to have what we believe is a clear, efficient path forward for zuranolone. We are now one step closer toward our goal of helping people living with MDD and PPD by bringing them a treatment that, in clinical development to date, has demonstrated rapid and sustained reductions in depressive symptoms with a well-tolerated safety profile."

In Q4 2021 Sage and Biogen announced they would submit an NDA to the FDA for zuranolone in the second half of 2022 for the treatment of MDD (major depressive disorder), based largely on the Waterfall study data. Will be a rolling submission. An additional filing for PPD (postpartum disorder) is anticipated in the first half of 2023. This follows recent discussions with the FDA, including a pre-NDA meeting held in the fall of 2021. In October 2021, Sage and Biogen had announced that data presented at the European College of Neuropsychopharmacology (ECNP) Congress further showed a rapid and sustained reduction in depressive symptoms and a unique and well-tolerated safety profile.

In Q2 2021, with Biogen, Sage announced positive Waterfall Phase 3 zuranolone 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.

Already talking to KOLs and getting good feedback on the zuranolone data.

Zulresso (brexanolone) for postpartum depression royalty revenue was $1.4 million, down from $1.6 million year-earlier.

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 report data late in 2021. A Phase 2 placebo controlled trial for Huntington's is on track to start in 2021. The Parkinson's Phase 2a stduy had positive results reported in Q3 2021. It is an NMDA modulator. It received Fast Track designation in Q3 2021. Integrated analysis of data so far showed positive cognitive effects.

Phase 1 study for SAGE-689 for acute GABA hypofunction continues enrollment.

Phase 1 study of SAGE-904 for NMDA hypofuction continues enrollment.

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. It is 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 $1.84 billion, down sequentially from $1.91 billion.

Cost of goods sold were $0 million. R&D expense was $83 million. Selling, general and administrative expense $49 million. Total operating costs $132 million. Income from operations negative $131 million. Interest and other income $1 million.

Q&A summary:

The new Coral endpoint was chosen to show the rapid effects of zuranolone. We think physicians will look at the totality of data.

Durability of effect from a regulatory standpoint? Statistical significance at the later timepoints is not required. Looking for a durable impact without rapid return to baseline.

Why not use the day 3 data in the filing? In 2020 the FDA recognized MDD was the major unmet medical need. The studies were designed so that only one positive trial was needed to file. The change to day 3 will benefit us, will help inform physicians, but we do not need it to file.

R&D run rate? Q3 showed some increase due to stock based comp partly in R&D. We are accelerating the pipeline. We expect to see some addition increases as we expand the pipeline.

Sage-324, types of epilepsy that might be covered? Lowers synchronized activity in the brain, so should be good for a variety of seizure types. We will be discussing specific targets with our partners.

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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 2021 William P. Meyers