Analyst Conference Summary

biotechnology

conference date: February 11, 2025 @ 1:30 PM Pacific Time
for quarter ending: December 31, 2024 (fourth quarter, Q4)

Forward-looking statements

Overview: Zurzuvae revenue growth was slow, though prescriptions grew faster.

Basic data (GAAP):

Revenue was $12.8 million, up 8% sequentially from $11.9 million, and down 84% from $78 million year-earlier. Q4 2023 included a $75 million milestone payment.

Net income was negative $95.8 million, down sequentially from negative $93.6 million, and down from negative $32.7 million year-earlier.

Earnings per Share (EPS) were negative $1.56, down sequentially from negative $1.53, and down from negative $0.55 year-earlier.

Guidance:

Believes cash runway to mid-2027. Op ex to decrease y/y in 2025.

Conference Highlights:

Barry Greene, CEO, said "We are proud to have helped thousands of women with postpartum depression in 2024. Zurzuvae is being recognized as an important treatment option for women with postpartum depression and we believe it will continue to be instrumental in accelerating progress in maternal mental health. In 2025, our focus will remain on helping more women with postpartum depression receive treatment with Zurzuvae, advancing our focused R&D efforts, and creating near and long-term value for Sage and its shareholders." Committed to financial discipline, should see first results in Q1 2025. Seeing signs of changing treatment patterns by physicians for PPD.

A strategic reorganization of Sage was announced in October 2024. Focus will be on the Zurzuvae launch and on dalzanemdor for HD. Should reduce costs. Expects op ex to decrease in 2025 from 2024. Will discontinue research on Zurzuvae for major depressive disorder.

In Q4 2024 Sage received $11.4 million, up 4% sequentially from $11.0 million, in collaboration revenue from Zurzuvae (50% of net revenue from Biogen). More nearly 2,500 prescriptions shipped, up 21% sequentially. Most payers are aligned to provide access as a first line therapy. Coverage discussions continue to progress, with positive feedback. Obgyns are the main prescribers so far, about 80% of total. 95% of commercial and Medicaid lives now covered. Inventory levels have normalized. The three national PBMs now have favorable access policies. Repeat prescription rate reached 60%. For about 70% of Zurzuvae PPD patients, it is their first treatment.

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

Zulresso is being discontinued in favor of Zurzuvae. Sales in Q4 2024 were $0.4 million.

Sage-718, now Dalzanemdor, has an ongoing Phase 2 study in cognitive impairment associated with Huntington's Disease, and an open-label Phase 3 safety study in HD. The study in Alzheimer's failed in Q3 2024.

Sage plans to further expand the Zurzuvae salesforce in 2025. Also some DTC ads.

SAGE-319 for disorders in social interaction (autism), data from Phase 1 study expected by end of 2025.

Also has SAGE-817, SAGE-324 and SAGE-039 in pre-clinical development.

Cash and equivalents balance ended the quarter at $504 million, down sequentially from $569 million.

Cost of goods sold were $1 million. R&D expense was $37 million. Selling, general and administrative expense $54 million. Restructuring $22 million. Total operating costs $115 million. Income from operations negative $102 million. Interest and other income $6 million.

Q&A selective summary:

Biogen and marketing expansion? Aligned with Biogen for 2025 on salesforce, DTC ads, social media influencers, etc. Split expenses 50/50, so Biogen is also spending more. PPD awareness also plays a role in screening and diagnosis.

Inventory in quarter? Free drugs? Dynamics are there for blockbuster potential. Scripts do go through specialty pharmacies. Revenue is when product goes to wholesaler level. Some inventory also at specialty pharmacies. Demand and shipments are the most important metrics. Free drug does play a role, in Q4 the % of patients on free drug is declining.

Q1 seasonality? Anticipate q/q growth in Q1. Reimbursement is mainly private and medicaid, so we do not see the Medicare Q1 decline. We also saw some holiday disruption in Q4, which we won't see in Q1.

Expected effects of sales expansion over time? We had them in place for entire Q4, saw a 33% increase in areas they covered. Believes will continue to accelerate demand.

We can continue to scale efforts if we think the returns are there. Which we do.

Other, difficult targets, use of capital? Neuro-psych is what we have the knowledge and molecules for. We believe they are a good fit for these disorders, based on preclinical data. We are trying to treat the behaviors associated with these diseases, not cure the diseases. We can get anwers to efficacy relatively quicly with the negative allosteric modulators (NAMs).

PPD guideline revisions? ACOG we have phenomenal guidelines, Zurzuvae is the only drug specifically mentioned. Was in place before approval.

Site penetration? We are not surprised by the dynamic. Strategy is to start with OBGyns, where we see significant uptake. But women can develop symptoms well after birth, so will be expanding education to those providers going forward.

Higher demand but flatish revenue, gross to net? Channel management and inventory.

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