Analyst Conference Summary


Sage Therapeutics

conference date: February 24, 2022 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2022 (Fourth quarter, Q4)

Forward-looking statements

Overview: Plans rolling NDA submission for zuranolone soon.

Basic data (GAAP):

Revenue was $2 million, up sequentially from $1 million, and down from $1.1 billion year-earlier, which was largely collaboration revenue.

Net income was negative $125 million, up sequentially from negative $130 million, and down from $974 million year-earlier.

Earnings per Share (EPS) were negative $2.12, up sequentially from negative $2.21, and down from $18.19 year-earlier.


Expects cash and equivalents balance of $1.3 billion at the end of 2022. No milestone payments expected in 2022. Believes is funded into 2025.

Conference Highlights:

Barry Greene, CEO, said "2021 was a data rich year marked by important advancements in multiple disease areas across all of our brain health franchises. I'm excited to build on this foundation, especially with the initiation of the rolling NDA submission for zuranolone in MDD planned for early this year. We believe the entirety of the development program to date supports zuranolone's potential to address substantial unmet needs in major depressive disorder and postpartum depression and to be a differentiated treatment option for people with these brain health disorders."

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, starting in Q1 2022. 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. Received Fast Track designation. CORAL study z + ADC met its primary and key secondary endpoints. Shoreline study enrollment is ongoing, now with over 1000 patients.

The commercialization approach for zuranolone was discussed (Slide 25).

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

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

Collaboration with Biogen has resulted in a decrease in R&D expense, but plans to expand the pipeline mean that will increase again. SG&A also expected to increase in 2022 as preparing for zoranolone launch.

Zulresso (brexanolone) for postpartum depression royalty revenue was $1.6 million, flat sequentially and down from $1.7 million year-earlier.

SAGE-324 Phase 2 placebo-controlled study for essential termor is planned.

SAGE-718 Phase 1 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 begin enrollment in 2022. A Phase 2 placebo controlled trial for Huntington's continues. The Parkinson's Phase 2a study had positive results reported in Q3 2021. More trials are planned to commence in 2022. 718 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 $1.74 billion, down sequentially from $1.84 billion.

Cost of goods sold were $0.1 million. R&D expense was $75 million. Selling, general and administrative expense $52 million. Total operating costs $127 million. Income from operations negative $125 million. Interest and other income $1 million.

Q&A summary:

Feedback from physicians on Coral results? We have received a lot of feedback, and it is quite encouraging. Rapid effect and safety profile opened eyes. MDD with elevated anxiety data was also appealing; those patients have been hard to treat. Add that to Shoreline showing lasting effect, and it is very appealing.

Timeline for new 718 trials? Data is possible in 2023, but it depends on accrual rates, we will give guidance after the trials are up and running. We are seeing sustained improvement in cognition. Goal of new trials is to replicate the positive results of earlier trials, with placebo controls.

We see the 718 trials as serially derisking. The FDA is interested in seeing real world performance, which varies by the disorder treated. We want to see translation into benefits that are meaningful to patients.

Bear cases for Sage: as needed dosing approach; difficulty of changing a treatment paradigm? We designed the trials with the FDA, including the sequence of them. Then we added the retrospective analysis of MDD + anxiety, and added that into Coral. We are enthusiastic about the regulatory path forward, including the anxiety subpopulation. Commercially, there are 5 particular patient types that are well suited to zuranolone, and we have discussed that with payers. There is a lot of switching in the current market because the patient population is not satisfied.

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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 2022 William P. Meyers