Analyst Conference Summary

biotechnology

conference date: November 7, 2023 @ 5:00 AM Pacific Time
for quarter ending: September 30, 2023 (third quarter, Q3)

Forward-looking statements

Overview: Zuranolone, now Zurzuvae, approved by FDA for postpartum depression, but awaiting DEA approval. Should become commercially available in December.

Basic data (GAAP):

Revenue was $3 million, down sequentially from $na million, and up from $2 million year-earlier.

Net income was negative $202 million, down sequentially from negative $160 million, and down from negative $137 million year-earlier.

Earnings per Share (EPS) were negative $3.37, down sequentially from negative $2.68, and down from negative $2.31 year-earlier.

Guidance:

Cash should support operations into 2026.

Conference Highlights:

Barry Greene, CEO, said "It has been an exciting time at Sage as we prepare for the upcoming commercial launch of Zurzuvae, the first and only oral treatment specifically indicated for adults with postpartum depression. Women with PPD are waiting for new treatment options and we have an incredible opportunity to support them. Our goal is to make Zurzuvae available later this year and to enable broad and equitable access for women with PPD who are prescribed this drug. We see the same opportunity to break new ground for patients as we work to advance treatments that address cognitive impairment associated with certain diseases and essential tremor where novel and meaningful new options are long overdue." 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. Recently received a Schedule IV classification from the U.S. Drug Enforcement Administration (DEA). Schedule IV drugs, substances or chemicals are defined as drugs with a low potential for abuse and low risk of dependence. Will start sales in December 2023. A full treatment course wholesale acquision price is $15,900.

Sage expects a $75 million milestone payment from Biogen for the first commercial sale of Zurzuvae. Biogen and Sage have completed the hiring of the sales team. Most payers are aligned to provide access as a first line therapy.

SAge estimates that about 477,000 women experience PPD annually in the US. However, many cases are undiabnosed or untreated when diagnosed.

Believes reorganization will save $240 million annually.

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.

In October 2023 the FDA granted orphan drug designation to Sage-718. 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. In 2024 top-line data is expectef from 4 of the Phase 2 trials.

SAGE-324 Phase 2 placebo-controlled study for essential termor is enrolling, with completion now not expected until late 2023. Topline data likely mid-2024. Partnered with Biogen. The Phase 1 study showed a 50% tremor reduction in ET patients.

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 $876 million, down sequentially from $1.00 billion.

Cost of goods sold were $1 million. R&D expense was $102 million. Selling, general and administrative expense $78 million. Restructuring expense $34 million. Total operating costs $215 million. Income from operations negative $212 million. Interest and other income $10 million.

Q&A selective summary:

Zurzuvae targeting effort, HCPs? Majority of women with PPD will be seen by Obgyns, who now are more likely to screen. Also psych offices. Engaging high volume providers.

Prior authorization requirements? Goal is broadest access. Engaged with payers, does not expect complex prior authorizations, due to value of the treatment and our pricing.

Initial formulary reviews? That takes time, varies by plan. Some plans always have a six month wait. We will have programs to ensure prescriptions are filled.

Timeline for filling scripts early in the launch? Untreated PPD has estimated cost of $32,000. We have a distribution model designed for rapid access and affordability to the patients, so they should be able to access it within days of the prescription.

Biogen partnership color? Working diligently hand in hand.

Provider feedback? Media attention spilled over into patients, advocates, and providers. Announcement of commercial availability should keep that going. We are seeing good interactions, including with opinion leaders and patient access organizations.

The only prior authorization we expect is checking that the presciption is for a postpartum woman with PPD. Physicians can distinguish between baby blues, which is mild and short duration, and PPD.

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