Analyst Conference Summary

biotechnology

conference date: August 2, 2022 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2022 (second quarter, Q2)

Forward-looking statements

Overview: Continues submitting rolling FDA submission for zuranolone

Basic data (GAAP):

Revenue was $1.5 million, down sequentially from $1.6 million, and down from $1.6 million year-earlier, which was largely collaboration revenue.

Net income was negative $126 million, down sequentially from negative $122 million, and down from negative $107 million year-earlier.

Earnings per Share (EPS) were negative $2.13, down sequentially from negative $2.07, and down from negative $1.83 year-earlier.

Guidance:

Cash at end of 2022 around $1.3 billion. Spending to increase for R&D and product launch preparation. Believe cash sufficient through 2025.

Conference Highlights:

Barry Greene, CEO, said "The first half of 2022 has been marked by important clinical and regulatory achievements across our entire pipeline, paving the way for continued focused execution throughout the remainder of the year. We are making progress on the NDA submission for zuranolone and building our organization to support a potential launch. Based on the consistent clinical profile of zuranolone, we believe it has the potential, if approved, to address the significant unmet need for people suffering from Major Depressive Disorder and Post-Partum Depression and we are working with a sense of urgency toward our goal of bringing zuranolone to them. Beyond zuranolone, we are continuing to advance our pipeline, with the presentation of multiple data sets at key upcoming scientific congresses. I believe our progress this year, combined with the strong foundation we've built, supports our growth as a leader in brain health and a top-tier biopharmaceutical company" Commercialization preparations for zuranolone are well underway; 50-50 cost sharing with Biogen. Payer feedback is positive given unmet medical need and rapid responses.

In April 2022 Sage and Biogen started a rolling NDA submission to the FDA for zuranolone for the treatment of MDD (major depressive disorder), based largely on the Waterfall study data. Complete submission is expected before end of 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. The Shoreline study, following patients up to 12 months, showed sustained positive effects.

Sage is preparing its go to market approach for zuranolone.

Data from two zuranolone studies (that were stopped in 2020 when Sage decided to go with a larger, 50 mg dose) were shared. Rainforest showed zuranolone may benefit sleep efficiency. The Redwood study showed no new safety findings.

Zuranolone topline data from the Coral for MDD was positive. Skylark Zuralonlone for PPD topline data was positive.

The Sunbird study of Zulresso for PPD in a woman's home completed enrollment in July 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 enrolling, with completion expected in 2022. Partnered with Biogen. The Phase 1 study showed a 50% tremor reduction in ET patients.

Sage-718 is in studies for Huntington's, Parkinson's, and Alzheimer's caused cognitive disorders. The Huntington's and Parkinson's trials are in Phase 2. A Phase 2/3 OLE study in Huntington's should start in late 2022. A Phase 2 study in Alzheimer's should start in 2022.

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

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

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 $1.51 billion, down sequentially from $1.63 billion.

Cost of goods sold were $0 million. R&D expense was $77 million. Selling, general and administrative expense $52 million. Total operating costs $129 million. Income from operations negative $128 million. Interest and other income $2 million.

Q&A selective summary:

Rainforest, will data be shared with FDA? Will present data of 30mg dose to FDA, but is not required for the filing. Finding could help commercialize Zuranolone.

FDA interactions? Highly confident. Confirmed totality of data required. All modules are in hand and on schedule.

Framing of Shoreline in NDA? Largest naturalistic study in depression. 80% required needed only 2 or 4 week course of treatment in the year. It also is a large safety database, will inform physicians on retreatment.

Redosing proposal? 14 day course of treatment. Physicians can offer treatment free periods. But if patient reports renewed symptoms another course could be prescribed. But we do not know what will be on the label for retreatment.

Ad Com? Do not know, we are ready if there is one.

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