Analyst Conference Summary

biotechnology

conference date: August 7, 2023 @ 5:00 AM Pacific Time
for quarter ending: June 30, 2023 (second quarter, Q2)

Forward-looking statements

Overview: Zuranolone, now Zurzuvae, approved for postpartum depression, but CRL for major depressive disorder.

Basic data (GAAP):

Revenue was $2.4 million, down sequentially from $3.3 million, and up from $1.5 million year-earlier.

Net income was negative $160 million, down sequentially from negative $147 million, and down from negative $128 million year-earlier.

Earnings per Share (EPS) were negative $2.68, down sequentially from negative $2.46, and down from negative $2.13 year-earlier.

Guidance:

Cash runway to 2025. Believes operating expenses will decrease in 2024.

Conference Highlights:

Barry Greene, CEO, said "We are currently at a tipping point with the burden and prevalence of brain health conditions accelerating at an alarming rate. The need has never been greater than it is today and our team is singularly focused on changing the trajectory of these devastating diseases through our development efforts and novel pipeline. We were delighted to receive FDA approval for Zurvuvae as the first-and-only oral treatment specifically indicated for adults with postpartum depression, the most common medical complication of childbirth. We believe the need for new treatment options for women with PPD is a significant medical need and presents a strong business opportunity. While we were very disappointed by the recent Complete Response Letter we received from the FDA regarding zuranolone in the treatment of major depressive disorder, we are reviewing the feedback from the FDA and evaluating next steps. We are currently evaluating resource allocation, including pipeline prioritization and a workforce reorganization with a goal of extending our cash runway. With a right-sized organization and portfolio, we believe we have an opportunity to emerge as an even stronger company. We plan to provide greater detail and next steps before the end of the third quarter." Detailed plans to be fully ready to treat patients by year end, including a full course therapy sample program.

The FDA approved Sage and Biogen's filing for PPD (postpartum disorder) for zuranolone, now Zurzuvae, in early August 2023. However, the FDA issued a CRL (complete response letter) for the treatment of MDD (major depressive disorder). 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. In the CRL, the FDA stated that the application did not provide substantial evidence of effectiveness to support the approval of zuranolone for the treatment of MDD and that an additional study or studies will be needed. Sage and Biogen are reviewing the feedback from the FDA and are evaluating next steps.

On August 7, 2023 Sage announced additional data from the open-label SHORELINE Study in MDD, specifically from the cohort of patients (n=277) that rolled over into the SHORELINE Study from the CORAL Study. In this cohort, the adverse event profile and the data generated on repeat treatments were similar to previously reported data from other cohorts of the SHORELINE Study, with no new safety signals identified. Sage plans to present further analyses from the SHORELINE Study at future medical congresses.

Zulresso (brexanolone) for postpartum depression royalty revenue was $2.46 million, down sequentially from $3.3 million and up from $1.5 million year-earlier. Zulresso has been available for several years, but has a high burden of administration.

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 $1.00 billion, down sequentially from $1.13 billion.

Cost of goods sold were $0 million. R&D expense was $97 million. Selling, general and administrative expense $75 million. Total operating costs $173 million. Income from operations negative $171 million. Interest and other income $10 million.

Q&A selective summary:

Prescriber base size, sampling program v. initial demand? We have a strong business case. About 500,000 potential patients per year. Cannot give numbers for sample program yet, but want physicians to get experience with zurzuvae. We will have prescriber and other details closer to launch. We will set the price right.

MDD issues you can discuss? Extremely disappointed. We do not agree with the FDA's view. 6 of 7 placebo controlled studies supported the application. We can't speculate on the FDA's thinking at this point. We have a team preparing for FDA interactions.

Label surprises? We think the label is fine for PPD. Nothing in it is surprising or problematic. Instruction not to drive for 12 hours after dosing. We conducted driving studies, which did show driving impairment. Patient safety has to be top of mind. Zurzuvae had less abuse potential than the control used in the studies, but is dose dependent.

What might cause you to decide to not move forward on MDD? Cannot comment further.

Pricing considerations? Have been talking to payers, now have to talk to them again with approval. We want to provide rapid and equitable access.

There was no Ad Com, which we had taken as a positive sign.

$225 milestone from Biogen? $75 million from Biogen for PPD. Cash into 2025.

We are not going to overscale for the launch of PPD. We have an extraordinary collaboration with Biogen. As we get closer to launch we will talk about our access strategy.

OpenIcon Analyst Conference Summaries Main Page

Search

More Analyst Conference Pages: