Analyst Conference Summary


Sage Therapeutics

conference date: November 8, 2022 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2022 (third quarter, Q3)

Forward-looking statements

Overview: Continues submitting rolling FDA submission for zuranolone

Basic data (GAAP):

Revenue was $1.7 million, up sequentially from $1.5 million, and up from $1.4 million year-earlier, which was largely collaboration revenue.

Net income was negative $137 million, down sequentially from negative $126 million, and down from negative $130 million year-earlier.

Earnings per Share (EPS) were negative $2.31, down sequentially from negative $2.13, and down from negative $2.21 year-earlier.


Expects to end 2022 with about $1.3 billion in cash. Ramps into 2025.

Conference Highlights:

Barry Greene, CEO, said "This has been an important year for Sage, marked by the execution of significant milestones across our franchises. Looking ahead, we remain focused on the completion of the NDA submission for zuranolone in MDD and PPD, and are well into commercialization preparations to support a potential launch. Patients with depression are desperate to find new medicines that are safe, rapid-acting, short course, and have a sustained effect. We believe zuranolone, if approved, has the potential to deliver a new treatment option for patients. In parallel, our team is advancing multiple clinical studies across our pipeline that span our neuropsychiatry and neurology franchises. I am proud of the tremendous progress our team has made on behalf of patients this year and am energized by the momentum we have going into 2023 and beyond." Commercialization preparations for zuranolone are well underway; 50-50 cost sharing with Biogen. Payer feedback is positive given unmet medical need and rapid responses; exploring value-based agreements. National dialog is shifting to support people suffering from depression.

Sage and Biogen's rolling NDA submission to the FDA for zuranolone for the treatment of MDD (major depressive disorder) is expected to be completed in December 2022. An additional filing for PPD (postpartum disorder) is now also expected in December 2022. 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. If the FDA grants priority review, the PDUFA date could be in Q3 2023.

Zulresso (brexanolone) for postpartum depression royalty revenue was $1.7 million, up sequentially from $1.6 million and up from $1.4 million year-earlier.

Expects R&D expense to continue to ramp. Received $18 million in reimbursements from Biogen in Q3 2022.

IND enabling work is undersway for SAGE-319 for disorders in social interaction.

IND enabling work is underway for SAGE-421 for neurodevelopmental disorders, cognitive recovery, and rehabilitation.

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.

SAGE-324 Phase 2 placebo-controlled study for essential termor is enrolling, with completion now not expected until late 2023. 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, including mild impairment. 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; shared design [see Slide 34]. Addition data should be presented in 2022. Has shown data with improved executive function.

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 $1.4 billion, down sequentially from $1.51 billion.

Cost of goods sold were $0.2 million. R&D expense was $82 million. Selling, general and administrative expense $61 million. Total operating costs $143 million. Income from operations negative $141 million. Interest and other income $4 million.

Q&A selective summary:

NDA, Ad Com, possible topics? FDA decides on Ad Com, prepared for it if it happens. Questions would be about efficacy, safety, and the mechanism of a novel approach. We believe the totality of our data should be sufficient to answer.

Commercial strategy, Biogen, add ons and switches in various settings? We are working well with Biogen, including commercialization. Payers are receptive, about 7 million of the 20 million people with depression look for a therapy change each year. Psychiatrists are excited about Zuranolone, so are primary care physicians.

Value-based payment approach? Typically used in orphan space, but we believe we can apply it to the MDD space. That would give us more rapid access to payment. Payers recognize profound unmet need, strength of data.

SAGE-324 enrollment? Dose ranging study. Challenges to enrollment include patient access, competition from other essential tremor trials, competition for trial sites.

Pricing for zuranolone? Access strategy priority is to enable physicians and patients. Will be priced in line with value to market. Will stay out of high price specialty tier. Discussing value vased agreements with payers.

Currently MDD patients tend to change therapies relatively frequently, despite view that they get on a therapy and stay on it forever. Physicians are also seeing the benefits of earlier interventions.

We did human abuse potential studies and they will be part of the filing. Our comparison to a standard was favorable. Patients who have completed a course of treatment are not showing a desire to get back on drug, unlike other anti-depressants.

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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