Analyst Conference Summary

biotechnology

conference date: May 2, 2023 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2023 (first quarter, Q1)

Forward-looking statements

Overview: Getting ready for potential zuranolone approval.

Basic data (GAAP):

Revenue was $3.3 million, up sequentially from $2.9 million, and up from $1.6 million year-earlier.

Net income was negative $147 million, up sequentially from negative $154 million, and down from negative $122 million year-earlier.

Earnings per Share (EPS) were negative $2.46, up sequentially from negative $2.47, and down from negative $2.07 year-earlier.

Guidance:

Cash runway to 2025.

Conference Highlights:

Barry Greene, CEO, said "We are laser focused on progressing launch readiness activities in collaboration with Biogen and we believe that our planned strategic approach to the commercialization of zuranolone, if approved, will help us to achieve our vision of transforming the way depression is treated."

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 $3.3 million, up sequentially from $2.9 million and up from $1.6 million year-earlier.

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. It is in an open-label Phase 3 safety study for HD cognitive impairment.

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 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. Sage is now prioritizing Huntington's programs. 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 $1.13 billion, down sequentially from $1.27 billion.

Cost of goods sold were $0.2 million. R&D expense was $93 million. Selling, general and administrative expense $66 million. Total operating costs $159 million. Income from operations negative $155 million. Interest and other income $9 million.

Q&A selective summary:

Shoreline update midyear? Will include rollover patients from Coral trial. Large study will update many data points.

Zuranolone patient access program? Direct to Consumer program? Will use DTC quickly. For access we want patients who need it to get it regardless of payer status. Early DTC will be targetted, then later we will go broader.

Commercial preparation, Biogen? We are highly aligned on go-to-market and hiring. Focus is on specific groups of physicians with patients waiting for zuranolone. Will deploy between PDUFA date and DEA date. Samples, a full course of therapy, will be a part of the strategy so physicians can see real world effects.

We believe IRA (inflation reduction act) will be averse to innovation. But it depends on how the IRA is implemented.

Isn't it more likely first use will be in the treatment refractory population? We are aligned on value-based agreements. Feedback from payers is for PPD is they can allow for it frontline. For MDD payers are considering for certain cases. At first, yes, most will be diagnosed with MDD and will have tried some other therapy. There is significant payer interest in zuranolone as the first add or first switch.

Our bar for in-licensing is very high.

We are considering indications beyond PPD and MDD for zuranolone, along with Biogen.

Discussed pricing, but gave no specifics.

Quick responders not taking the full case? Need to educate prescribers and patients on taking hte full 14 day course.

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