Analyst Conference Summary

biotechnology

conference date: April 25, 2024 @ 5:00 AM Pacific Time
for quarter ending: March 31, 2024 (first quarter, Q4)

Forward-looking statements

Overview: First full quarter of Zurzuvae sales. Good ramp.

Basic data (GAAP):

Revenue was $7.9 million, down sequentially from $78 million, and up from $3.3 million year-earlier.

Net income was negative $108 million, down sequentially from negative $33 million, and up from negative $147 million year-earlier.

Earnings per Share (EPS) were negative $1.80, down sequentially from negative $0.55, and up from negative $2.46 year-earlier.

Guidance:

Cash should support operations into 2026.

Conference Highlights:

Barry Greene, CEO, said "The launch of Zurzuvae is off to an encouraging start, reflected in the strong performance in the first full quarter of the launch. We are seeing increasing demand among HCPs, particularly OBGYNs, and hearing inspiring success stories from women with PPD treated with Zurzuvae. Importantly, momentum in commercial and government payor coverage is helping to support our goal of broad and equitable access for women with PPD. In parallel, we are working with urgency to advance efforts across our pipeline. While we are disappointed by the results of the Phase 2 Precedent study given the significant burden of mild cognitive impairment on people and families affected by Parkinson's Disease, we look forward to the other data readouts for dalzanemdor and SAGE-324 expected in 2024."

The FDA approved Sage and Biogen's filing for PPD (postpartum disorder) for zuranolone, now Zurzuvae, in early August 2023. In November 2023 received a Schedule IV classification from the U.S. Drug Enforcement Administration (DEA). Biogen started sales in late December 2023. A full treatment course wholesale acquision price is $15,900. Because there is now a good oral therapy, providers are working on better screening for PPD. Demand is strong and continues to grow; Q1 exceeded expectations.

In Q1 2024 Sage received $6.2 million in collaboration revenue from Zurzuvae, or 50% of net revenue, from Biogen. More than 700 prescriptions in the quarter. Most payers are aligned to provide access as a first line therapy. Coverage discussions continue to progress, with positive feedback. Medicaid review is ongoing in some states. HCPs are becoming more confident in making diagnoses. Obgyns are the main prescribers so far.

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

In Q1 the mild cognitive impairment from Parkinson's Disease Phase 2 trial of Dalzanemdor had negative results.

In October 2023 the FDA granted orphan drug designation to Sage-718, now Dalzanemdor, in Huntington's. Sage-718 remains in multiple Phase 2 trials for mild cognitive impairment for AD and Huntington'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 tremor completed enrollment in January 2024. Topline data likely mid-2024. Partnered with Biogen. The Phase 1 study showed a 50% tremor reduction in ET patients.

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.

IND enabling work is underway for SAGE-689 for acute GAGA hypofunction.

Cash and equivalents balance ended the quarter at $717 million, down sequentially from $753 million. The $75 million collaboration milestone was recorded in Q4, but received in Q1 2024.

Cost of goods sold were $1 million. R&D expense was $72 million. Selling, general and administrative expense $53 million. Restructuring expense $0 million. Total operating costs $126 million. Income from operations negative $118 million. Interest and other income $9 million.

Q&A selective summary:

Powering 324 study? Trial details are on the trials.gov site. Phase 3 discussions taking place with Biogen and experts. Phase 2 study was statistically significant. Looking for a chronic administration dose from Kinetic 2 study.

Q1 revenue was both for filling orders and building inventory. It was wholesale revenue. Believes was demand driven.

Free drug percentage? Number of subscribers keeps building. We want to get the drug to all women who get a prescription. Coverage is improving.

Symptom onset or diagnosis to prescription? No solid data yet. But ObGyn prescriptions, and about half being naive for depression, indicates being picked up relatively quickly.

Patients not getting Zurzuvae after diagnosis? Payer coverage now at 65% of commercial lives, mostly without need for difficult preauthorization. If a physician has not prescribed Z yet, we need to do some education.

Zurzuvae ex-US? Biogen is responsible ex-US.

Dalzanemdor variation in different indications? Decades of research on receptors in cognitive dysfunction. However, the specific receptor is likely to be distict in different indications. Huntington's, the lead indication, has a stronger rational for working with the specific receptor Dalzanemdor targets. Huntington's population tends to be younger, Alzheimer's older. The disorders are distinct, so the outcomes can be distinct.

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