Sage Therapeutics Q2 2023 Earnings Call Transcript

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Provided by Quartr
August 7, 2023

There are 16 speakers on the call.

Operator

Good morning, and welcome to Sage Therapeutics Business Update. Currently, all participants are in a listen only mode. This call is being webcast live on the Investors and Media section of Sage's website at sagerx.com. This call is the property of Sage Therapeutics and recording, reproduction or transmission of this call without the expressed written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded.

Operator

Answered. I would now like to introduce Ashley Kaplowitz. Please go ahead.

Speaker 1

Good morning and thank you for joining Sage Therapeutics conference call to discuss business updates, including the FDA approval of zuranolone, now branded in the United States as ZERZUVE, recorded as a treatment for results with postpartum depression or PPD. Before we begin, I encourage everyone to go to the Investor and Media section of our website at ataidirect.com, where you can find the press release related to today's call as well as slides that we will be reviewing today. Recorded. I would like to point out that we will be making forward looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, recorded and our actual results may differ materially.

Speaker 1

Please review the risk factors discussed in today's press release and in our SEC filings for additional details. Scheduled. We will begin the call with prepared remarks by Barry Green, our Chief Executive Officer. Then Laura Gault, our Chief Medical Officer, scheduled to review the label for XERZUVE and supporting clinical data. Our Chief Business Officer, Chris Bunecki, will highlight our commercial preparations and launch plans for XERZUVE and PPD ready and Kimi Iguchi, our Chief Financial Officer, will close with a financial update.

Speaker 1

Jim Doherty, our Chief Development directed to the operator for the Q and A portion of the call. With that, I'll now turn the call over to Barry.

Speaker 2

Now open. Thanks, Ashley, and thank you everyone for joining us today. This is a historic moment for all women suffering from PPD. Scheduled to be released. On Friday, we and our collaboration partner, Biogen, received approval from the FDA for zuranolone, now known as XERZUVE, scheduled for the treatment of adults with PPD.

Speaker 2

XERZUVE is the 1st and only oral treatment specifically indicated for PPD. Scheduled to be recorded. Hundreds of thousands of women have been waiting and hoping for this moment. We hear so many devastating stories about the impact of PPD and many of us have been personally touched, but it's often neglected condition that's estimated to affect approximately 500,000 women each year. Today, there is a new source of hope.

Speaker 2

Before we begin, I'd like to take a moment to sincerely thank the dedicated healthcare providers, to patients, caregivers and advocates who have made today possible, especially the patients who have placed their immense trust in us throughout our clinical trials. We are and will always be an inspiration for us. We applaud your dedication to seeking new treatment options for PPD. Answered. I'd also like to comment on the status of our NDA seeking approval for zuranolone in the treatment of major depressive disorder or MDD.

Speaker 2

Recorded. As many of you have seen, late on Friday, we received a complete response letter from the FDA for zuranolone as a treatment for adults with MDD. We are devastated for patients and deeply disappointed with the FDA's position in issuing the CRO. We are reviewing feedback from the FDA and evaluating next steps. As we have clarity, we'll share more.

Speaker 2

Many have questions that we can't answer and others that we just simply can't at this time. Now just to be clear, progress in treating depression is not keeping pace with the accelerated prevalence and burden of this debilitating disease. Despite current treatment options, people with depression continue to struggle.

Speaker 3

Scheduled to

Speaker 2

be a change in the treatment paradigm and approval of novel options is desperately needed. Later in the call, Kimi will provide an update based on the financial implications given this development. For those of us who've been in the biopharmaceutical industry for decades, going through adversity is an opportunity to come out more lean and agile on the other side. We will work through this. What I can say for now, per Sage, is that we'll be making smart, disciplined decisions intended to maintain a robust balance sheet.

Speaker 2

This is an opportunity to emerge as a stronger company with a refined strategy and a focused approach. Now turning back to our primary focus for today's call. Following Friday's approval, we have the 1st and only oral treatment specifically indicated for women with PPD. As a 14 day short course treatment, We believe that ZERZUVE will provide women with PPD a desperately needed new treatment option with the potential to treat their depressive symptoms quickly without the need for chronic treatment. Given the limited treatment options available for women with CBD, we're excited about the opportunity to bring ZERZUVA to those patients.

Speaker 2

Scheduled to launch and be commercially available in the Q4 of 2023 shortly following the completion of scheduling as a controlled substance scheduled to be filed by the USDA, which is expected to occur within 90 days of this approval. The widespread national media attention scheduled to be released on

Speaker 3

the approval of XERZURO for

Speaker 2

the treatment of women with PPD reinforces that this is truly a critical milestone given the significant unmet need that currently exists for the treatment of women with this disease. PPD is a serious medical condition. We know that women with PPD often face extreme challenges in their daily lives and with infant bonding, often feeling overwhelmed, anxious and isolated. Recorded. If left untreated, depressive symptoms can persist beyond a year postpartum, which can be associated with prolonged maternal morbidity and mortality.

Speaker 2

Scheduled to be associated with short term consequences in newborns, it can also result in long term developmental, Psychological, cognitive and physical ramifications for our children. The devastating generational impact of PPD has been often overlooked. With the approval of ZERZUVE, we now have the 1st and only oral treatment indicated for women with PVD and we stand ready to help. I want to take a moment to recognize the entire Sage and Biogen teams and our collaborators who brought us to this important day for women with PPD. None of what we do is possible without your hard work, dedication and faltering belief that together we have the potential to change the mental health landscape.

Speaker 2

I thank everyone of you for your contributions towards our mission. With that, I'll now turn the call over to Laura.

Speaker 1

Now open. Thanks, Barry, and good morning, everyone. The approval of SIRSOUVE in adults with PPD is a pivotal moment for the women who stand to benefit from this important therapy busy and a great moment for Sage and Biogen. The approval of XERZUVE further builds upon the foundation laid with Sage's first approved treatment for PPD recorded and reaffirms our commitment to helping mothers in need. I will start by providing background on XERZUVE, then I will highlight details of the prescribing information.

Speaker 1

The mechanism of action of cirzube in the treatment of PPD is thought to be related to its positive allosteric modulation of GABA A receptors, though the mechanism of action is not fully understood. As the primary inhibitory neurotransmitter, GABA immunobutyric acid or GABA is widely distributed throughout the brain. Present in brain regions functionally associated with mood, decision making and other behaviors. GABAergic neurotransmission is vital for normal brain function and evidence shows the GABAergic function may be disrupted in postpartum depression. Now I will summarize the clinical data supporting approval of CIRZUVA in women with PPD.

Speaker 1

Scheduled to be released on the data from the NEST clinical development program, which included the SKYLARC and ROBIN studies. These studies were Phase 3 randomized double blind placebo controlled trials that evaluated a 14 day treatment course atsurzubay once daily, used alone or as an adjunct to oral antidepressant therapy in women aged 18 to 45 with PPD. Both studies met the primary endpoint, showing a statistically significant improvement over placebo recorded at day 15 on the 17 item Hamilton Depression Rating Scale, a common measure of depression severity. Recorded. As shown in the figures, in both the SKYLARC and ROBIN studies, an improvement in depressive symptoms was seen as early as day 3 scheduled to be recorded.

Speaker 1

Now I'll provide an overview of the prescribing information, including the safety information. The recommended dosage of XERZUVE is 50 milligrams taken orally once daily in the evening for 14 days with fastened eating food. The dose may be reduced to 40 milligrams once daily if CNS depressant effects occur. Tirzubate can be used alone or as an adjunct to oral antidepressant therapy. Importantly, There are no contraindications in the label.

Speaker 1

In terms of safety, the boxed warning states scheduled to be recorded and are advised not to drive or engage in other potentially hazardous activities

Speaker 3

scheduled to be recorded until at least 12 hours after

Speaker 1

each dose. Patients should also be advised that they may not be able to assess their own driving recorded in at least 5% of patients who received XERZUVA and at a higher rate than placebo. These were somnolence, nasopharyngitis, busyness, fatigue, urinary tract infection and diarrhea. And finally, Well, I am personally disappointed that we will not be able to provide a new treatment option to patients living with MDD today as we had hoped. I am also truly excited that we and Biogen will be offering the 1st oral rapid acting short course treatment for women with BPD.

Speaker 1

Scheduled to be recorded. I can tell you from my clinical experience that we have the potential to help a lot of women with this debilitating condition. Now open. With that, I'll turn the call over to Chris. Chris?

Speaker 1

Thanks, Laura. I'm excited to

Speaker 4

be with all of you to share updates on our preparations scheduled for the planned commercial launch of XERZUVA as a treatment for adults with PGE. Today is the day of celebration. Scheduled to be released in the press release. The approval of

Speaker 3

XERZUVE reaffirms our call to action and

Speaker 4

the urgency that exists to bring this critical new treatment to women suffering with PPD. We know that PPD is all too prevalent in our society and the burdens that it places on new mothers can seem insurmountable. With this in mind, we are incredibly excited about the opportunity to bring a novel treatment option to market that we believe brings us closer to transforming the care of women living recorded. We have been preparing for a potential launch for many months by advancing permitted preapproval information exchange with payers, continuing scientific exchange with health care providers and engaging with patient advocacy organizations. Further, we have built an internal team of experienced commercial leaders whose depth and breadth of knowledge and experience further expand our go to market capability.

Speaker 4

We believe our preparations will enable us to be fully ready to execute the launch of XERZUVE to treat women with PPD by year end. A tremendous opportunity exists in PPD with estimates of approximately 1 in 8 women experiencing PPD symptoms in the U. S. Each year. That's about 500,000 women.

Speaker 4

Today, we know that only about 50% of PPD cases are diagnosed due to inadequate screening. Far too many women with PPD are not getting the care that they need because of the limited options available to them. Scheduled to be a first line therapy and become the standard of care. Our planned launch focus will be on women diagnosed with PPD requiring treatment. We believe the addressable patient population at launch includes those who are newly diagnosed and those experiencing unresolved symptoms despite taking antidepressant treatment.

Speaker 4

We're not going to stop there with our efforts to help women with PPD. We believe it will also be important to support efforts to increase diagnosis rates in PPD, Building upon the recent guidelines updated by the American College of Obstetricians and Gynecologists, which recommend increased screening during the pre and postpartum period. While thinking big about the unmet need in treating women with PPD, we alongside our collaboration partner Biogen expected to implement a focused launch strategy that can be scaled with success to reach more women with PPE. We plan to leverage our omnichannel capability powered recorded in the Q4 of 2019 and the Q4 of 2018. At launch, we plan to have our focused field sales teams targeting high prescribing psychiatrists, OBGYN and PTPs should treat women with PPD with a consistent frequency of promotional messages and resources.

Speaker 4

Additionally, we plan to advance non personal promotion efforts with digital platforms designed to reach a broad set of HDPs treating these patients. These digital platforms are intended to unite data from our content, media and in person interactions. It's also vital that our omnichannel work directly reaches women with PPD at launch. Our planned efforts are intended to directly engage these women with education and resources, so they're aware of XERZUVA as a treatment option in PPD and are prepared to have a meaningful discussion about XERZUVE with their HCPs. HCPs will be a central focus of this planned omnichannel approach as they will ultimately be directly responsible for making the decision to prescribe Tsurzumab in the treatment of women with PPD.

Speaker 4

We believe early and positive clinical experience and accessibility for women with PPE will be critical to building confidence an accelerating adoption of ZERZUVE in this indication. HCP experience with ZERZUVE in treating women with DPD will be instrumental to update. We plan to have initiatives at launch in support of this. First, a full course therapy sample program that will distribute a 14 day short course of therapy directed to appropriate HCPs to trail XERZUVA in the treatment of women with PPD. We believe this targeted early program will be critical to enabling rapid clinical experience with XERZUVE that will ultimately drive long term uptake in this PBE population.

Speaker 4

The 2nd plan initiative is intended to help enable our goal that every woman with PPE who is prescribed XERZUVA can access it regardless of her financial circumstances. We plan to facilitate this effort through patient access programs at launch, including co pay assistance for eligible women with PPE who are commercially insured. We intend to discuss our planned commercial strategy, these initiatives and other planned support for women with PPD closer to the time of launch. We're collaborating across the ecosystem with payers, healthcare providers, patient advocates and policymakers with the goal of providing a model for care directed to the patient's health care system. In every state, there is a call to action to prioritize expanding and increasing access to treatment scheduled for Maternal Mental Health.

Speaker 4

There is a need for solutions to address the significant gaps in care. As a new standard of care for women with PPD and a harbinger for being changed. ZERZUVE could improve outcomes for these patients, potentially lessen the overall burden and costs on society, and more importantly, to support these mothers and their infants to help them thrive. We believe that a combination of these efforts will help build a positive experience with XERZUVA, both for women with CBD and HDPs who treat them. Finally, let's turn to market access.

Speaker 4

Well, it's too early to talk about price. Here's how we're thinking about it. We plan to implement a PPD access strategy that recognizes the unmet need, considered a considerable economic burden and a novel clinical profile of Zuubay. We will continue to work with payers with the goal of favorable access scheduled to be recorded and identified ways we might partner, including the potential role of value based agreements. We've had numerous permitted engagements with payers in the months leading up to PDUFA And payers recognize the significant unmet need for new treatment options in PPD and have been enthusiastic about the clinical profile of XERZUVA in this indication.

Speaker 4

As we said, our goal is that every woman with DPD who is prescribed XERZUVA can access recorded regardless of financial circumstances. As part of our final preparation, Sage and Biogen are currently working to determine adjustments to our thinking on price given the PPD label. We plan to provide more clarity on our overall thinking closer to product launch. What we can say now is that approximately 55% of U. S.

Speaker 4

Births are covered by commercial insurance and our planned patient access approach for women with PPD for commercially insured as the goal of enabling a vast majority of these women have access to XERSUVA with minimal out of pocket costs. The remaining births receive coverage through Medicaid, which requires little or no financial responsibility for the patient. We expect decision by payers as to coverage as a key to the next slide. This is a key to the next slide. This is a key to the next slide.

Speaker 4

This is a key to the next slide.

Speaker 3

This is a key to the next slide. This is a

Speaker 4

key to the next slide. This is a key to the Through our planned commercialization efforts, we expect to rapidly reach both women with PPD and the HCPs to treat them. Finally, our goal is to enable a favorable access environment so that women with PPD who are prescribed XERZUVA are able to get it both rapidly and affordably. We feel this urgency because women with TED are waiting. I'll now turn it over to Kimi to provide a financial update.

Speaker 4

Kimi? Thanks, Chris, and good morning, everyone. I want to

Speaker 1

share my excitement for this new chapter of opportunity and hope for women with PPD. Energized to push forward and help so many of these women. And as Barry noted earlier, we are reviewing the feedback from the FDA in the CRL for MDD in evaluating next steps. Given these recent developments, I'd like to briefly comment on what this update means for our financial position. We will continue to make smart, disciplined decisions as we work to balance cash on hand and revenue generation with our operating expenses.

Speaker 1

We believe we are well capitalized with $1,000,000,000 in cash as of June 30. And based upon our current estimates, We expect that our cash, cash equivalents and marketable securities along with the anticipated funding from ongoing collaboration and potential revenue Will support operations into 2025. With that said, given the update relating to the CRL and MDD, We are refining our strategy. We plan to take action with the goal of extending our cash runway and are currently evaluating resource allocation, including pipeline prioritization and a workforce reorganization. As a result, we also anticipate operating expenses a decrease in 2024.

Speaker 1

As Barry said, we are working towards a successful launch in PPD and believe the changes we plan to make will enable us to be a stronger, leaner and a more focused company. We expect to provide greater detail and next steps recorded before the end of the Q3 as our plans unfold. Before I turn the call over to Ashley for Q and A, I want to reiterate our excitement around this monumental milestone for Sage. We look forward to the commercial availability of DIRZUVA later this year and will act with urgency to help enable women with PPD who are prescribed XERZUVEG who have access to it. Let me also add that I know there are many questions out there given CRL and MDD.

Speaker 1

As we always have, we'll provide updates when we can. Now open. With that, I'll turn the call over to Ashley. Thanks, Kimi. Before I turn it over to the operator, I'll ask that you limit yourself to one question.

Speaker 1

If you have an additional question, feel free to return to the queue. Now, I'll turn it over to the operator to handle Q and A. Operator? Thank

Operator

We'll go first to Salveen Richter with Goldman Sachs.

Speaker 5

Good morning. Thanks for taking my question and congratulations on the approval here in PPD. Maybe just to starting here with the launch. You talked about the outreach effort with the prescribers. Could you just quantify the subscriber base for us and help us understand the targeted approach and also how a sampling program will work in the context of ensuring you're not soaking up all that initial demand.

Speaker 5

Thank you.

Speaker 2

Yes, Salveen, thanks. And thanks for The congratulatory note, we're really excited about the approval of ZERZUVA in the treatment of women for PPD and we're really looking forward to helping We're excited about the opportunity and believe we have a strong business case. We've kind of with the right size organization and the right price, We've got many tailwinds that may help us in launching tirzumab for the treatment of women. As you noted, it's a big unmet need, about 500,000 women in the U. S.

Speaker 2

Experiencing symptoms each year. Saxon is the 1st and only oral treatment approved for women with PPD, and we believe health care providers are looking for a tool like this to solve their dilemma on what to do when they diagnose a mom with PPD. And we know that the payers, and I'll ask Chris to comment more about the sample program, We are looking forward to a new option for PPD. And certainly, and we mentioned this in the script, that every state And policies they're implementing policies that we believe will enable access for women at PPD. We can't talk about yet our targeting numbers per se or the size of the sampling program, but maybe Chris can talk about the importance of the full course treatment and activating healthcare providers to seek the results and further their own eyes.

Speaker 4

Yes. Thanks, Barry. So at launch, we're going to focus our field sales team, as I said in my opening remarks on high prescribing OBGYN psychiatrist and PCPs. And as you noted, it's going to be really important for that group of physicians. They have early experience with ZERZUVE and what that entails is giving them access to a 14 day full course therapy sampled so that they have that experience to see the impact that XERZUVA can have on women living with PPD in their practice.

Speaker 1

Can I just

Speaker 5

follow-up just quickly just to get a sense of quantification of that physician base that you're targeting initially and just help us understand the flexibility you have on pricing and PPD?

Speaker 2

Yes. So, right now, we really can't talk about the kind of the size of the physician bases. As you're well aware, we and our collaborators, Biogen, have been working wholeheartedly on preparing for a PPD and MDD launch. It has done a lot of work. Of course, We have PPD scenarios that we've played out, but now the work begins for a PPD focused launch.

Speaker 2

As we close to launch, we'll come back out with specifics about how we're targeting. As Chris said in his remarks, we're thinking big about the opportunity, but we're going to start in a very focused way clear metrics to scale with success. In terms of pricing, as I said, we think that with the right priced in the right size organization. We have a very strong business case and we're setting about to do that work now.

Speaker 1

Thank you.

Operator

Thank you. We'll go next to Ritu Baral with TD Cowen.

Speaker 6

Good morning, guys. Thanks for taking my question. And I'd like to add my congratulations The drug is available for PPD patients.

Speaker 1

I would like to focus

Speaker 6

a little bit on MDD Barry. I know you can't Talk too much about the interactions and status, but Could you go through at least what happened during the review? Any review issues that were discussed at the mid cycle review that are now a focus of unresolved questions. And then, what is your expectations of timing for a typing meeting to reach clarity on what else is needed?

Speaker 2

Yes, Regina. Again, thank you for the congratulatory note. And as you asked, we'll focus on this is MDD. So Just to be clear, we're extremely disappointed for patients with MDD. We're devastated that we're not able to help them right now.

Speaker 2

And actually, we do not agree with the FDA you on Zersueh for MDD. The mental health crisis is having a devastating impact on our communities, as you know, and we're in desperate need of innovation. So So if I back up, we in accordance with FDA last year filed our NDA package and we had started the rolling submission earlier in the year with some of the modules. Scheduled to be recorded. In the clinical section, we had what we believe was 6 of 7 placebo controlled positive clinical studies in support of that package, which we believe was supportive of both TPD and MDD.

Speaker 2

We learned late in the review cycle about FDA's view on approvability for MDD. And as we noted, we received the CRL late on Friday. So, the review of the NDA filed in past involves an analysis of the submitted information, and we really can't speculate on the FDA's thinking or decision making. It simply reflects on what they put in the CRL, which again we got late Friday. So we're reviewing the feedback and evaluating next steps and we're excited to launch Suzuve and PPD as we work with our collaborators Biogen in understanding what our next steps with FDA on MDTR.

Speaker 6

Do you anticipate interaction even before a Type A meeting?

Speaker 2

I really can't say Anything else we do except that we advise in reviewing the feedback and evaluating next steps. We've got the right team on it.

Speaker 1

Got it. Thank you.

Speaker 2

Thank you.

Operator

We'll go next to Paul Matteis with Stifel.

Speaker 7

Thanks so much. I guess without being able to talk about the price, which was sort of my first question, I wanted to ask a little bit about the label, Because I think there are a few things on there that surprise investors and might have read through into the pipeline. One was commentary on abuse, Another was a commentary in a prior dog study, which seems like it might have been an impediment to chronic administration, and then also restrictions around driving. How do are those surprising to you that they were on the label, 1? And 2, Do those put into question the profile of SAGE-three twenty four, which has been given chronically and has the same mechanism of action?

Speaker 7

Thank you.

Speaker 2

Hey, Paul, thank you for the question. Let me just start out and I'll turn it to Laura to talk about some of the specifics. So We believe that the label that's provided for us for the treatment of PPD is a fine label. It's a label that is instructive, it's protective and it's instructive for healthcare providers and their patients. Certainly a label that allows us to sell ZERZUVA For the treatment of PPD for women and a label we can move forward.

Speaker 2

So nothing in the label is surprising per se Or problematic, but maybe Laura can talk more about that.

Speaker 1

Sure. Thanks for the question, Paul. I'll start first with your question related to driving. So as you see in the label, there is a boxed warning for driving that instructs prescribers to counsel their patients not to drive or engaged in other potentially hazardous activities until at least 12 hours after each dose is through Zuvi for the duration of the 14 day treatment course. This recommendation was based on data that's included at the end of the label that summarizes the results of 2 driving studies that Sage conducted.

Speaker 1

I recorded. I can summarize briefly the results from the 50 milligram dose because that's the most relevant since it's the clinical dose. At the 50 milligram dose, So Zuvi caused driving impairment after one day of dosing and after 7 days of dosing, which was the last time point measured. The label contains very clear instructions for patients. And from our perspective,

Speaker 3

being recorded.

Speaker 1

Patient safety has to be top of mind and it's good that these clear instructions are in the label because it will enable physicians to have Good discussions with our patients about the benefit risk profile of those remaining. With regard to abuse liability, This is not unexpected for a drug with a mechanism of action like for Zuvi. As you can see from what's in the label, there are results from abuse liability studies that show that Tsurzubay at 30 60 milligrams has less abuse potential than the control, which was the Benzodiazepine, scheduled, but at the 90 milligram dose was approximately equivalent in obese potential to benzodiazepines. Based on this, We expect that tirzubay will be DEA scheduled, likely scheduled for like similar drugs like benzodiazepines. The prescribers who will be prescribing medications for PPD are experienced in prescribing Schedule 4 agents And we don't expect this to be an impediment to use.

Speaker 2

Yes. Let me wrap back with your question about the rest of the pipeline or gabapam. So As we stated, we intend to complete the kinetics WHO study for SAGE-three twenty four at the end of the year. Every a new chemical entity has its unique entity and it's hard to understand if there are any read throughs in this label or not. Typically, labeling occurs on the basis

Operator

We'll go next to Yasmeen Rahimi with Piper Sandler.

Speaker 1

Good morning, team, and thank you so much for hosting this call and taking our question. I know there's a lot that you can tell us about, MDD, but could you maybe comment on What are some of the requirements that you would want to maybe not go through in case, like If there is multiple additional studies required, is that something that you would want to do? I guess what we're trying to figure out is like your commitment to really move this forward and getting this approved. And then the second question for me is just sort of helping us understand How many courses of XERAY would be used in patients with PPD, whether you would recommend 1 or 2, and if you could maybe help us understand on sort of the use of this product within 1 year. And I'll jump back into the queue.

Speaker 1

Thank you.

Speaker 2

Yes. Thanks for the question. Let me start with PPD and I'll circle back. So what we saw in our clinical studies On the profile of XERZUVE was these women that took XERZUVE in the evening with a meal saw rapid response as early as 3 days, Continued response up to date 15 that's clinically relevant and statistically different than placebo and that effective is blasted out to day 45 with statistical significance to clinical relevance. So with that profile, we envision that a mom would take one a 14 day course in the course of the year because the trigger event was getting pregnant or having that baby.

Speaker 2

So I guess the short answer is 1. Now looping back to the CRO, I'll repeat it. We're extremely disappointed for patients and we don't agree with the FDA's view. They issued the CRL related to NDA for zuranolone for the treatment of adults with MDD. And what I can say is what the CRL says, which is scheduled to be released.

Speaker 2

The application did not provide substantial evidence of effectiveness to support the approval of zuranolone, the treatment of MDD and that additional study or studies are needed. We're reviewing the feedback and evaluating next steps and we really can't comment further other than that.

Speaker 1

Okay. Thank you. Thank you. Thank you so much.

Speaker 2

Thanks, guys.

Operator

Next to Anupam Rama with JPMorgan.

Speaker 8

Hey, guys. Thanks so much for taking the And congrats on the PPD approval here. Barry, you've mentioned a couple of times the right price and PPD. Maybe you can give us a little bit of color on the bookend to kind of consider whether it's VULRESSO or other products? And what are the key considerations to getting to that right price?

Speaker 9

Thanks so much.

Speaker 2

Yes, Anupam. I'll start and I'll turn it over to Chris up and again, thank you very much for the congratulatory note. Again, we're really excited to help women suffering from PPD. Just to be clear, we can't comment on price or bookends right now. As I mentioned, we did a significant amount of approved a pre commercial payer introduction with the plan to launch MDD and PPD.

Speaker 2

We had significant amount of conversations about what the value based agreements would look like. Frankly, we're prepared for PPDMDD launch with payers to move forward in contracting. We now have to go back Given the results from Friday and the fact that we got the CRL Friday and reengage payers, but We have some basis to do that. Maybe Chris will talk more about that.

Speaker 4

Yes, sure. Thanks, Barry. We historically said truly transformational. We must be accessible to ZERZUVE. We're committed to the goal of rapid and equitable access to ZERZUVE for the 100 of thousands of women Who live with PPD.

Speaker 4

When we think about the approval of DERZUVA and the treatment of women with PPD in the absence of an MDD indication, we'll need to consider the the size of the patient population, obviously the strength of the clinical data, including statistical significance at all time points and the clinical potential of ZERZUVA to address significant unmet need for new innovative options in the treatment of postpartum depression. These factors ultimately are what will influence our target wholesale acquisition cost. However, regardless of the WACC, our goal is that every woman, as I said, with PPD is prescribed to Zuube can access it regardless of her financial circumstances. Thanks for taking our question.

Speaker 2

Thanks, Anupam.

Operator

We'll go next to Tazeen Ahmad with Bank of America.

Speaker 1

Jen, I just wanted to clarify, did FDA ask you to submit both applications for PPD and MDD at the same time? Or was it the preference, or was it Sage's preference to do it together? Also, you mentioned that The comments from FDA about the concerns around MDD didn't come until late in the review cycle. Would there have been any opportunity to have

Speaker 2

Yes, Celine. Several different questions in there. So if I go back historically 2.5 years, 3 years. We did, as Sage announced that, we were going to file the NDA for both PPD and MDD. You might remember at some point it looked like our PPD study was delayed and at that point we went out and said we're going to file MDD first and PPD after that.

Speaker 2

And then as the PPD study caught up, we announced that we were going to start a rolling submission and then launch both PPD All of that was done in concordance with FDA. In terms of what I can say about the interactions, As you noted, we filed the NDA. The FDA in February, we announced the FDA gave us a PDUFA date scheduled to be recorded in the Q4 of fiscal 2020. And then about a month or so later, the FDA told us there was no AdCom required, which at the time, obviously, we took a deposit And then just to add to that, we found out late in the review cycle about the FDA's view on the approvability of MDD. Other than that, I can't say much more.

Speaker 3

Okay.

Operator

We'll go next to Brian Abrahams with RBC Capital Markets.

Speaker 8

Hi, good morning. My congratulations as well on the approval in PPD. Maybe a question on MDD. Do you see a potential for a more narrow or refined indication like the treatment of an acute depressive episode or adjunctive treatment? Is this something that was ever discussed with the agency or potentially on the table.

Speaker 8

And if this is a possibility, do you think additional studies would be required to support that or not? Thanks.

Speaker 2

Brian, thank you. And thank you very much for a very insightful question. I guess what we can say at this time is, we're extremely disappointed for patients, whether it's for the treatment of MDD or a different indication. And we don't agree with the FDA's view. We are evaluating the CRL and as soon as we can provide more clarity, we will on what the next steps are.

Speaker 2

We really do believe that zuranolone should be available to treat patients with MDD, but we've got to get there. And until we're there,

Speaker 3

Thanks.

Speaker 2

Thank you.

Operator

We'll go next to Jay Olson with Oppenheimer.

Speaker 4

Hey, thank you for taking the

Speaker 10

question and congrats on the PPD approval. We have a financial question. Since you'll be eligible for a $225,000,000 milestone from Biogen and you'll also experience potentially significant cost savings in the near term without an MDD launch. Are you in a financial position to accelerate the development of SAGE-seven eighteen? And do you plan to continue that development independently or potentially seek a partnership?

Speaker 10

Thank you.

Speaker 2

Yes, Jay. First of all, thanks for the congrats to our note. I'll let Kimi talk about the milestone and some of our financial thinking. But in terms of SAGE-seven eighteen, we continue to be really excited by developing SAGE-seven eighteen, our wholly owned NMDA, PAM. The data we've seen to date is exciting in terms of cognitive improvement that we saw in Huntington's, Parkinson's and Alzheimer's, albeit approach studies and open label studies.

Speaker 2

As you're well aware, we have a significant number of 5 well controlled studies underway right now, several in Huntington's And then Parkinson's and Alzheimer's, those should set us up for a very data rich year next year in terms of stage 718. And as we've commented before, We believe that the Huntington's package is set up in a way that if we see robust data and given that it's an orphan indication, we do believe there's some regulatory flexibility and we'll pursue that flexible approach. Whether it accelerates or not is another question. That's a matter of No clinical studies enrolling and how rapidly they enroll. But we have said previously that we're excited at Sage alone to launch Sage 718-one hundred and eighty, given the orphan nature and the sort of smaller capital footprint That means we're excited to do that.

Speaker 2

Kimi, can you talk about kind of milestones and other financial guidance? Sure. Thank you. It's a

Speaker 1

great question. So just a reminder, earlier I talked about that based on our current estimates, we expect that the cash on hand, anticipated funding from collaborations and potential revenue will support our operations into 2025. And we also mentioned that we have a potential to earn a milestone payment of $75,000,000 from Biogen related to the first commercial sale of DERZUVE scheduled for the treatment of PPD. But to be clear, based on the receipt of the CRL on Friday evening, we are looking forward to and plan to refine our strategy and spend. So that's going to really include an evaluation of our resource allocation.

Speaker 1

We'll be looking at the pipeline. We'll be looking at a workforce reorganization and that's all with the goal of extending our cash runway. We expect our evaluation of our resource allocation will We'll create the feedback from the FDA that we have at that point in time. So we expect that we'll be able to update all of you by the end of Q3 open and we'll certainly talk to you once we have the floor into place.

Speaker 2

And Jay, just some additional color since you mentioned it. As Chris Bohnacki said, we're thinking big about to help moms with PPD is 500,000 women, but it certainly starts with a very focused footprint in terms of commercialization, omni channel, And then we'll have markers that scale that with success, but we're certainly not going to overscale the launch for PPD.

Speaker 10

Great. Thank you very much.

Speaker 2

Thanks, Jay.

Operator

We'll go next to Samant Kulkarni with Canaccord.

Speaker 11

Good morning. Thanks for taking my questions. How collaborative with Biogen do you expect the ZERZUVA launch to be? And do you expect to announce pricing on PPD prior to interacting with the FDA on MDD or after?

Speaker 2

Sumant, thank you. Thank you for those questions. So In terms of Biogen, we and Biogen have been working extraordinarily collaboratively, preparing for the potential of an MDD and PPD launch if approved. We and they got the label and the approval for PPD Friday night and the serial for Friday night. And then as you saw, we together issued a joint press release a couple of hours later announcing that we plan to launch tirzumab scheduled for PPD and have that launch available in the Q4 this year and shortly after the DEA scheduling, which takes approximately 90 days.

Speaker 2

So that was a joint collaborative press release. Now with the approval of PPD in front of us and then CRL, we now turn our attention to working towards The appropriate launch of PPD in response to CRL and we plan on doing that, as I said, together. In terms of price timing, As we get closer to launch, we will be talking about our access strategy as well as some of the other aspects of our commercialization. That will be closer to

Speaker 3

Thank you. Thanks, Vlad.

Operator

We'll go next to Laura Chico with Wedbush Securities.

Speaker 12

Good morning. Thanks very much for taking the question. I guess just kind of following up on that. I don't know if there's any color you can provide on kind of the remainder of 2023 in terms of the acceleration on SG and A in terms of PPD launch preparation. And I guess I'm trying to understand kind of the allocation of resources also between you and Biogen.

Speaker 12

And I guess I'm just trying to understand More broadly, Barry, you had some good comments with respect to how those two partners have interacted over the weekend here. But what is Biogen's commitment due to a PPD launch that would just seem a little bit of a difference than if MDD was involved. Not sure if you can add any color there. Thank you.

Speaker 2

Yes, Laura. Thanks for all those questions in one question. So I guess what I can say is that I can point to the joint press release where we advise and committed that we have ZEREDUVA available for PPD scheduled in the Q4 shortly after DA scheduling. I can't really talk more about the allocation resource yet. As I said, we worked really hard being recorded and prepared for the potential of an MDD and PPD launch if approved and had that clearly well mapped.

Speaker 2

With the news on Friday, the approval of PPD, the CRL for MDD, We're now turning our attention to do the work necessary for what the launch of TTE looks like. And as we get closer to launch, we can talk more about What that looks like. In terms of SG and A or other bills, as Kimi said, we anticipate Looking at all resources as well as our workforce and as I commented earlier, we do believe that Even in PPD, with the right price and the right size of organization, we've got a really strong business case.

Operator

We'll go to our next caller from Amy Fadia with Needham and Company.

Speaker 13

Hi, good morning. This is Ethan Lee on for Ami. Thanks for taking our question. Maybe just kind of on regarding kind of Biogen again, I mean, Just I think just kind of the recent comments at earnings and the acquisition they announced, it just I think it's created kind of a perception by some that maybe there Could be less committed to MDD. So I kind of hear you on the joint press release and stuff, but maybe like how much I mean, can you give us a sense just like how much commitment do you think Bajan is on Serrano loan and NDD?

Speaker 13

And then with regards to a potential kind of re submission efforts and kind of the effort that would be required for that life. I mean, what role would you anticipate Biogen kind of playing in that? Thank

Speaker 2

you. Yes. Again, thank you for the question. I really can't say anything more than we've already said. We're preparing for the launch of ZERZUVE and PPD and examining This is your L.

Speaker 2

We're reviewing the feedback and evaluating next steps. I can't really comment more than that.

Operator

We'll go next to Vikram Parujit with Morgan Stanley.

Speaker 8

Hi, this is B for Vikram. Thanks for taking our question and Congrats on approval. I have a quick question about the PPD. What do you expect the state to state gross to net to be for the Rouvy? And how long do you think You can get there.

Speaker 8

Thank you.

Speaker 2

Since we Already talked about the idea that we're going to turn our attention to work on WACC and launch. It's too early to talk about closed

Speaker 3

today. Thank you.

Operator

We'll go next to Mark Goodall with Leerink.

Speaker 9

Yes, good morning. My question is around MDD and you in guidance from FDA, they talk about But it's not clear that you had that in a second study, and I was curious if that was the reason that the FDA did not approve the MDD and if that is the case or whatever the case is, are you and your partner 100% committed to doing another ready in order to do whatever the FDA needs to get MTP. Thanks.

Speaker 2

Thanks for the question, Marcus. As I said, we're extremely disappointed for patients with the CRL and we don't agree with the FDA's views. So That's what I'm going to say right now. All we can say is what we did, which in accordance with FDA, we filed our NDA last year what we believe was 6 of 7 positive studies and that their endpoints in world controlled studies. That was our belief set when we filed the NDA, of course.

Speaker 2

And we cannot just say what the CRL states, as I've already said, which is that the application lacks substantial evidence of effectiveness and that additional Study or studies are required. So we intend on evaluating CRL and pursuing next steps in Biogen.

Speaker 9

But if you need to do another study, what's the FDA saying, are you we're going to do another study, we'll do whatever it takes to get MDD or you're not it's not clear yet?

Speaker 2

So Mark, let me just repeat. We're disappointed for patients that we don't agree with the FDA. We're evaluating the feedback and reviewing next steps.

Speaker 3

Okay.

Operator

We'll go next to Akash Tewari with Jefferies.

Speaker 8

Hey, thanks for taking my question and congrats on the PPD approval. I guess in your collaboration agreement, it mentioned that Biogen could terminate the contract on a product by product basis by giving 150 days in advance written notice. Is there a development juncture where Biogen wouldn't be able to Terminate the agreement, let's say, for zuranolone. And have you received any notice from Biogen at this point? I just wanted to confirm.

Speaker 8

Thank you.

Speaker 2

Yes, Akash. I guess what I can say is there are termination provisions in the agreement. I can also say that after receiving the PPD approval and the CRL, we jointly worked to issue the press release that committed to launch of Zuvi in the Q4 for PPD shortly after the DEA scheduling. So I'll leave it at that.

Operator

We'll go next to Tim Lugo with William Blair.

Speaker 14

Thanks for the question. Can you walk us through the scheduling process in the next few months? It seems like most are viewing it as a formality. However, we've had rises in benzo addiction and abuse in recent years and sometimes classified as a result of the class wide issues can get wrapped up into single product discussions. So can you just help us frame the risk around that process?

Speaker 2

Yes. Thanks for the question, Tim. So the FDA refers to Zuvi to the DEA for scheduling review. We anticipate that to occur within 90 days. And as you heard Laura say, we expect to have a Class 4 label, which is not an issue for prescribers or for patients.

Speaker 3

Great. Thank you. Thanks, Tim.

Operator

We'll go next to George Farmer with Scotiabank.

Speaker 10

Open. Hi, thanks for taking my question. Two things, if may, real quickly. How long do you think that the sampling program will last As we think about modeling drug penetration in the market. And also, Can you speak to your comfort level of risk to feeding newborns and if you've done any particular studies to address that?

Speaker 10

Now

Speaker 2

open. Yes. Thanks for the question, Jordan. I'm glad for some new questions. Thank you.

Speaker 2

So let me start a little bit and then I'll ask Chris talked about sampling and then Laura talked about breast feeding. So if you take a step back, we believe that healthcare provider experienced with ZERZUVA in their own hands, seeing the profound and rapid effects that we saw in clinical trials that ZERZUVA has the potential to have on moms with PPD is critical to Stratus. So physician or healthcare provider activation and that's where we use the sampling program. Christy, talk about I can't talk to this.

Speaker 4

We have color

Speaker 2

on Houston and then we can turn it over to Laura for a press release.

Speaker 4

Yes. So Barry, what I can say is that, As in my prepared remarks, we see this as an early experience program that really focuses on giving physicians that experience

Speaker 2

in and around the time

Speaker 4

of launch once we have DDA scheduling. That's a finite window of opportunity for physicians to use that, the actual duration more later as we talk about to our actual go to market strategy and the details of commercialization, but it is a finite window that we see that in and around the time

Speaker 2

And what I can add is, we're not talking about all the markers, but it's likely in our quarterly calls after the launch of Zuzumab for PPD, We'll be providing some color on how many samples are out there and how that's going. Hillary, you want to talk about the breast feeding?

Speaker 1

Sure. So you raised an important question, George, given that this is going to be used in a population that's breastfeeding. Sage has done a clinical ligation study scheduled to be released in the Q1 of 2019. And the results of that study showed that there's very low levels of XERZUVA present in human milk. In fact, The calculated maximum relative infant dose for Zizubay is less than 1%.

Speaker 1

So what it says in the label then is that a physician scheduled to be recorded and will consider the developmental and health benefits of breastfeeding weighed with the potential exposure to XERZUVA in the breast milk. It's really important that we have this data in the label. It differentiates this label from other drugs that are used off label to treat MDD where this data is either absent Or the levels present in breast milk are much higher.

Speaker 10

Great. Thanks very much.

Speaker 2

Thanks, George.

Operator

We'll go next to Ui Ihir with Mizuho.

Speaker 5

Guys, thanks for taking my question. I have Two quick ones, if that's okay. So the first one, do you think it's easier now with only PPD Indications for you to obtain value base. And second one, just could you sort of remind us in the collaboration with Biogen, What are are there any fees if you if the collaboration is terminated, Any payments that in either directions you have to pay Biogen or Biogen have to pay you? Thank you.

Speaker 2

Dylan, let me start with a second, Duane. So there certainly are termination provisions in the contract that's about as far as I can go on that And then again, very insightful. We have as I mentioned, we have many tailwinds for a PPD focused launch. It's a large unmet need with about a half a 1000000 women in the U. S.

Speaker 2

Experience symptoms each year, only about half of whom are diagnosed per year. So real big opportunity on improving diagnosis. This will be the 1st and only oral treatment approved for women with TPD, so that's a big advantage. And then talking to healthcare providers who prescribe, they're anxious to have a product like AZUVA. The issue they have today, If they can't get access to ZULRESSO, is that the products they use take weeks to work, if at all.

Speaker 2

And as we know, many patients cycle through many different drugs. And these drugs we use today often come with comorbidities, weight gain, sexual dysfunction, GI impact. So at a prescriber level, let's say an OBGYN level, The course of treatment just doesn't fit into how they're dealing with mom and baby, whereas RSUVATE could be the solution to that problem. And certainly, payers has been historically supportive of this indication. And as mentioned, maternal mental health is on everybody's mind.

Speaker 2

It's been on television almost every night. It's at every state level for policies. And we have now the first oral treatment that could be a a solution set at least in PPD for maternal mental health and the policies that are happening at the statewide level.

Speaker 1

Thank you.

Operator

We'll go next to Yatin Sumeja with Guggenheim.

Speaker 15

Guys, thank you for taking my questions and Let me add my congrats on the approval. So just, two questions, one clarification and then one follow-up. So with regard to the It is our understanding that a control substance has limitation from a sampling perspective. So could you clarify Would you be able to sample it and also yes, just that. And then with regard to the commercial bill, I understand You provide us more detail once you launch.

Speaker 15

But let's say if you got approved for MDD and that requires 100 sales rep, Just trying to understand the commercial build around PPD. Is it 20 sales reps, 30 sales reps or 20% less? Just some So ballpark, just trying to gauge what the spend will be also as we model it. Thank you.

Speaker 2

Yes. So let me quickly answer both questions, so

Speaker 4

I know we're getting at the

Speaker 2

top of the hour. So what we said about the commercial Bill is that we're thinking big, but starting with a very focused way. Clearly, much more focused in PPE than it was in PPE and MDD, but we really can't provide numbers. We also heard from Kimi that we're prioritizing our pipeline and kind of when we'll resize the organization appropriate for This opportunity in the pipeline in front of us. So we'll communicate that in the next month or so.

Speaker 2

In terms of sampling, there are certain limitations on controlled states whether you can use an actual sample or a voucher, but we don't see that being a limitation to the concept on sample program.

Operator

This does conclude the question and answer portion of today's call. I would like to turn the presentation back over to Barry Green.

Speaker 2

Thank you, Ruth, and thanks again to everyone for joining us today. This is a special day for Sage, Biogen and all the women with PPD who being presented to benefit from XERZUVAY. We appreciate the continued support of all stakeholders and we look forward to providing more updates in the coming months. Thanks again everyone and have a great day.

Speaker 1

Goodbye.

Operator

This does conclude today's call. You may now disconnect.

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Earnings Conference Call
Sage Therapeutics Q2 2023
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