Analyst Conference Summary

biotechnology

conference date: February 16, 2023 @ 5:00 AM Pacific Time
for quarter ending: December 31, 2022 (fourth quarter, Q4)

Forward-looking statements

Overview: Completed FDA submission for zuranolone for major depressive disorder and postpartum depression.

Basic data (GAAP):

Revenue was $2.9 million, up sequentially from $1.7 million, and up from $1.6 million year-earlier.

Net income was negative $154 million, down sequentially from negative $137 million, and down from negative $125 million year-earlier.

Earnings per Share (EPS) were negative $2.47, down sequentially from negative $2.31, and down from negative $2.12 year-earlier.

Guidance:

Expects a $250 million milestone payment from Biogen if zuranolone approved by FDA. Including that, cash should allow operations into 2025.

Conference Highlights:

Barry Greene, CEO, said "Brain health disorders are one of the leading causes of disability . . . We set out in 2022 to deliver on a bold agenda; starting with the goal of transforming the treatment of depression. We have been laser focused on the opportunity to help millions of people who are desperate for new treatment options and the recent acceptance of the NDA filing for zuranolone in MDD and PPD puts us one step closer to that goal. We are also progressing a promising and targeted pipeline with the goal of being able to launch new drugs or indications for years to come. This momentum puts us in a position of strength... laser focused on the commercial development of zuranolone."

Sage and Biogen's rolling NDA submission to the FDA for zuranolone for the treatment of MDD (major depressive disorder) was completed in December 2022. An additional filing for PPD (postpartum disorder) was also made in December 2022. The FDA decision (PDUFA) deadline is August 5, 2023. More data from the Shoreline study is to be reported in mid-2023. Commercial preparations include hiring sales force, talking to payers and physicians. But launch will be delayed by a 3 month DEA scheduling review, so will not start until towards the end of 2023.

Zulresso (brexanolone) for postpartum depression royalty revenue was $2.9 million, up sequentially from $1.7 million and up from $1.4 million year-earlier.

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

IND enabling work is undersway for SAGE-319 for disorders in social interaction, advancing soon into Phase 1 studies.

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

Sage-718 remains in multiple Phase 2 trials for mild cognitive impairment for AD, Huntington's, and Parkinson's.

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 started in late 2022. A Phase 2 study in Alzheimer's started in 2022; shared design [see Slide 34]. Addition data should be presented in 2023. 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.

Cash and equivalents balance ended the quarter at $1.27 billion, down sequentially from $1.4 billion.

Cost of goods sold were $0.1 million. R&D expense was $89 million. Selling, general and administrative expense $67 million. Total operating costs $157 million. Income from operations negative $154 million. Interest and other income $8 million.

Q&A selective summary:

Clarify reason to not immediately launch after August PDUFA? Aside from an FDA delay, there is a three-month DEA review. We can't launch until that is complete.

Payers and pricing? We have a value-based agreement strategy. In return we want scripts filled quickly. Payers say they think about price per patient per year. Payers understand unmet need, they want something that works differently than available drugs. And with less side effects.

Ramp curve expected in PPD? We have a lot of focus on PPD. Working with OBGYNs for screening and diagnosis. Would be first FDA approved oral therapy for PPD. This is a paradigm shift because of zuranolone's rapid treatment effects.

We are working closely and well with Biogen. Christopher Viehbacher has great experience applicable to this launch.

Each physician has a DEA number, so can write presciptions, should not be a problem.

Refill process should be the normal process for this type of physicians.

Patients stopping before full course when feeling better? We do not see that, the label will encourage patients to complete the course.

Use as add on v. use as monotherapy? Views differ in the community, we have clinical data for both types, supporting both types of prescriptions.

An Ad Com committee would be totally at the discretion of the FDA. We are well prepared if that happens.

We expect, at some point, people to ask for zuranolone by name.

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