Sage Therapeutics Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
February 14, 2024

There are 18 speakers on the call.

Operator

Good morning. Welcome to Sage Therapeutics' 4th Quarter and Full Year 2023 Financial Results Conference Call. 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 atsagerx.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.

Operator

Please note that this call is being recorded. I would now like to introduce Ashley Kaplowitz, Executive Director of Investor Relations Good morning, and thank you

Speaker 1

for joining Sage Therapeutics' Q4 and Full Year 2023 Financial Results Conference Call. Before we begin, I encourage everyone to go to the Investors and Media section of our website at sagerx.com, where you can find the press release and slides related to today's call. 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, and our results may differ materially. Please review the risk factors discussed in today's press release and in our SEC filings for additional details.

Speaker 1

We will begin the call with prepared remarks by Barry Green, our Chief Executive Officer, who will provide an overview of our progress during the Q4 and full year 2023. Our Chief Business Officer, Chris Bunecki, will provide an update on the ongoing commercialization of XERZUBI. We will also be joined by Laura Gault, our Chief Medical Officer, who will review recent progress in development activities across our programs. We will then be joined by Kimi Iguchi, our Chief Financial who will review the financial results from the Q4 and full year 2023. Mike Quirk, our Chief Scientific Officer, will be available for questions during the Q and A portion of the call.

Speaker 1

With that, I'll now turn the call over to Barry.

Speaker 2

Thanks, Ashley, and thank you everyone for joining us this morning. 2023 was a pivotal year for Sage, highlighted by the approval and commercial availability of our 2nd FDA approved product, XERZUVE, The first and only oral treatment approved specifically for adults with postpartum depression or PPD. We have a big year ahead of us even greater potential to build a leadership position in brain health and a top tier biopharmaceutical company. Our reach and across various brain health conditions are key to our work to unlock potential breakthroughs to help patients suffering from a wide range of brain health diseases. Brain health diseases are one of the leading causes of disability worldwide, yet novel treatment options and care remain limited.

Speaker 2

We are seeking to change that with a pipeline designed to address brain health disorders and improve public health. Brain health is fundamental to well-being and function at each stage of life. Through a pioneering science, we aim to advance programs that have the to improve the lives of individuals living with brain health disorders and their families. We're focused on modulating brain network function in disrupted circuits, an underlying factor in many brain health disorders, starting with compounds that selectively modulate GABA and NMDA receptor activity, Our expertise in neuroacrystereides includes oxySculptemetry, allowing us to choose compounds for development based on a number of factors, including the potential to modulate circuits. DIRZUVAY is an important example of how we leverage our deep expertise in understanding these receptor systems to discover a novel therapy.

Speaker 2

23, where women with PPD in need of treatment could access health care providers. We're excited that we're getting this new treatment option to women who desperately need it. Of course, our work has continued in 2024 and inspired by the stories from our teams in the field in just the 1st few weeks of launch. Women with PPD and their families now have a treatment option with the potential to make a profound difference in their lives. The providers with whom we've spoken, Cesar Duvet as a potential catalyst to increase much needed screening, diagnosis and treatment of PPD across the healthcare system.

Speaker 2

It's early, but I do believe that tirzuve is the key to unlock the blockbuster potential of PPD, enabling us to help many women suffering from postpartum depression. Importantly, there have been encouraging developments across the treatment landscape. We're starting to see PPD recognized as an urgent medical condition. There is more conversation and dialogue about addressing stigma and the treatment system is mobilized to better support patients. I want to thank advocates and providers who have prioritized addressing maternal mental health treatment disparities.

Speaker 2

Turning to the launch progress, ZERZUV has generated $824,000 in collaboration revenue during the Q4 of 2023. As a reminder, our reported collaboration revenue is 50% of the net sales Biogen records for ZERUVAY. As we are very early in launch stages, we're not discussing specific revenue expectations or launch trajectory. However, what I can say today that we're encouraged by the initial progress we're seeing. Our early initiatives aimed at establishing ZERZUVE as the first line therapy for women with PPD have begun to translate into strong tailwinds for the launch of Zuzuvi.

Speaker 2

Just a few critical highlights. We're hearing that women with TPD are starting to step forward to advocate for Zuzuvering as they discuss treatment options with their health care providers. Health care providers, including psychiatrists, OBGYN, primary care, nurse practitioners and physician assistants are writing prescriptions for Zuzumab in the treatment of PPD. A specialty distribution network is in place designed to provide a positive experience for patients with convenient home delivery. The ZERZUVA for you patient assistance program is helping to support timely access for eligible patients.

Speaker 2

Of course, as I said, we're early launch days and their aspects of launch we certainly need to optimize, but the initial response and uptake are highly encouraging. Chris and Kimmy will provide additional updates later in the call and we look forward to sharing more detail on our progress in the coming quarters. While the launch remains our top priority, we're also excited by all that we have ahead of us in 2024 With multiple data readouts expected across our ongoing studies in das and mDAR, also known as SAGE-seven eighteen as well as SAGE-three twenty four. We believe in the potential of both molecules to help patients in need and to become significant drivers of long term value creation we aim to strengthen our leadership position in Brain Health. Additionally, we're excited about the continued progress on our early stage pipeline with SAGE-three nineteen and SAGE-four We remain confident in our ability to continue to execute across our pipeline as we head into a catalyst rich 2024.

Speaker 2

With that, I'll turn the call over to Chris to provide additional context on the ongoing commercialization of ZERZUVEG. Chris?

Speaker 3

Thanks, Barry. As Barry mentioned, we've made tremendous progress in these early days of XERZUVA's launch in PPD. And I'm excited to discuss our recent achievements and ongoing initiatives. At Sage, we share in the urgency to treat PPD. In the U.

Speaker 3

S, an estimated 1 in 8 women or approximately 500,000 women who have a live birth experience symptoms of PPD each year. Data suggests about half of those receive a diagnosis of PPD and approximately half of those begin treatment. The increasing recognition of PPD as a serious medical condition is a major step forward. However, we still have a collective responsibility to ensure maternal mental health is supported and treated as a core aspect of women's overall health. With the approval and launch of XERZUVE, we believe there is new hope for women with PPD.

Speaker 3

We also believe the focus on diagnosis, Screening and treating PPD provides an opportunity to make a meaningful impact on mothers, children and families. And now I'm happy to share some color on what we believe is an encouraging start to the early launch. At the beginning of the year, Barry highlighted our objective for women with PPD, enabling early positive HCP and patient experiences, partnering with communities to improve the focus mental health and providing clear education on XERZUVE and PPD to all stakeholders. With that in mind, we are encouraged by the demand we saw in the initial days of the launch. Let me share some metrics we believe are important and reflective of the progress we've seen.

Speaker 3

As a reminder, we announced commercial availability in mid December, So the data I'm sharing reflects demand from around 10 days when women with PPD could access HCPs. As of the end of the Q4, there were approximately 120 prescriptions written. With added launch capabilities In both Sage and Biogen sales representatives active in the field, we continue to be encouraged by the increasing number of prescriptions in early 2024. I'd like to note that this is a metric we intend to show in the initial quarters. However, over time, we will likely move away from this metric and focused primarily on shipments and collaboration revenue.

Speaker 3

In December, we were pleased to see prescriptions written by psychiatrists and importantly OBGYNs who prescribed in approximately equal numbers. We also saw a small number of prescriptions written primary care physicians and a number of HCPs wrote multiple prescriptions. All of these trends have continued into early 2024. Of the prescriptions written in December, over 70% were shipped in December early January. Our goal over time is for most women who are prescribed XERZUVA to receive the medication as quickly as possible.

Speaker 3

We saw many scripts in December take longer to ship than we'd like, which can be anticipated in the initial days of launch and over a holiday period. We expect that as launch progresses, women with PPD will have access to XERZUVA more rapidly, particularly as factors such as payer formulary decisions are made. HCPs and patients become more experienced in using our FTE network and the specialty pharmacy process is further optimized. Moving on, as Barry noted, our patient support program, XERZUVE4U, is activated and working well. In December, the commercially insured patients using the XERZUVA savings card paid no co pay expenses.

Speaker 3

We maintain our commitment to the goal of having XERZUVA be both broadly accessible and affordable for women with PPD. And importantly, on the coverage front, Conversations are advancing across national, regional and government payers and in the early weeks of the launch, the vast majority SHIP prescriptions are being covered by payers even as coverage policies are being developed. We are so far not encountering significant payer headwinds And to the contrary, we are seeing positive payer engagement. As we said, we expect commercial coverage formulary to continue to come on board in the first half of twenty twenty four with Medicaid stretching into the second half for certain states as that process typically takes more time. The early demand for XERZUVA is reflective of the strong enthusiasm we're hearing from HCPs in women with PPD for this medication.

Speaker 3

Further, as we look at who is driving the prescribing, we believe that the strong engagement across specialties and providers HCP appreciation for the need to treat PPD as an urgent medical condition regardless of the practice setting. And notably, these prescriptions are coming from HCPs, many of whom have been reached either through personal promotion or who have engaged with our website digital content, Reinforcing the initial impact of our omni channel efforts. We're still in the early weeks of launch and we know we have more work to do to help women with PPD treatment. With that said, we're encouraged by what we're seeing so far. The launch has reaffirmed the unmet need and urgency for a new medication for women and we know we need to continue to execute to maintain this momentum.

Speaker 3

I look forward to sharing additional details on our Enviogent's commercialization efforts in the coming quarters. With that, I will turn it over to Laura for a more detailed discussion of our recent pipeline progress and current clinical expectations. Laura?

Speaker 4

Thanks, Chris, and good morning, everyone. Over 2023, we have made important progress on our pipeline programs. And I am pleased to share our recent progress and plans for continued development over the coming quarters. I want to share my excitement to be part of such a significant moment for maternal health with the launch of Zuubay in the treatment of women with PPD. Not only are we seeing growing interest from HCP to learn more about tirzuve, but we believe the launch of tirzuve is a catalyst for positive change in the screening, diagnosis and treatment of PPD.

Speaker 4

We are seeing increased awareness and attention to PPD in the media and by professional organizations. This has increased knowledge about the cause of PPD and potential treatments and reduced stigma, making it easier for women to seek care. Further, I'm excited to see ZERZUVA being recognized amongst clinicians and OBGYNs in particular as a distinct new treatment option for women with PPD. It has a novel MOA and is a rapidly acting short course treatment with a flexible approach that gives HCPs the option to use ZERUBAY alone or in combination with other therapies. In a short period of time, we believe we are starting to see PPD move from the disease where some HCPs would suspect the diagnosis and refer for evaluation and treatment to a disease that HCPs are confident to diagnose and treat.

Speaker 4

Supporting mothers has always been a core focus for us, And we are excited we finally have an oral option for HCPs who want to offer more to women with PPD. In addition to the work that we do in PPD, we have many interesting programs in our pipeline. VALZAMM door, Also referred to as SAGE-seven eighteen is a program that we are really excited about. We are advancing dasimendore, our wholly owned 1st in class NMDA receptor positive allosteric modulator or PAM as a potential oral therapy for cognitive disorders associated with neurodegenerative diseases, including cognitive impairment in Huntington's disease or HD, Parkinson's disease, PD and Alzheimer's disease, AD. Disorders with cognitive impairment represent some of the greatest areas of unmet need in medicine.

Speaker 4

And we know that globally, they continue to increase in prevalence and pose significant challenges to patients in their everyday lives. The mechanism of action of Salzamemdor is differentiated and leverages our deep understanding of how neuroactive steroids interact with the NMDA receptor. A growing body of evidence suggests that NMDA receptor hyperfunction may occur in a wide range disorders associated with cognitive impairment, including Huntington's, Parkinson's and Alzheimer's. Zalzunmador is a novel molecule derived from our understanding of the pharmacology of a neuroactive steroid, 24S Hydroxy Cholesterol, and endogenous NMDA receptor PAN. Selzanmador is believed to bind to the NMDA receptor with the potential of modulating NMDA receptor to improve cognitive function.

Speaker 4

We are encouraged by the consistent effects on important domains of cognition as executive function and learning and memory that we've seen in our earlier studies in HC, PD and AD. And we are excited to be progressing a clinical development program for 1,000 mTOR with 5 ongoing clinical trials. Starting with HD, the lead indication for 1,000 mTOR, We are currently enrolling in 3 studies in people with cognitive impairment due to Huntington's. The DIMENSION study is a double blind placebo controlled Phase 2 study designed to evaluate the efficacy of 1 daily daltonemdor dosed over 3 months. The SURVEYER study is a double blind placebo controlled Phase 2 study designed to generate evidence linking efficacy signals of cognitive performance to real world functioning.

Speaker 4

And the purview study is an open label Phase 3 safety study of 1,000 mTOR designed to evaluate the long term safety profile and long term functioning compared to HD Natural History Study. As a reminder, the primary objective of the Surveyor study is to understand the magnitude of the cognitive impairment in Huntington's relative to healthy individuals. A key secondary objective It's to advance our understanding of the effects of delgam DOR on cognition and function in participants with Huntington's. It's important to note that the Surveyor study is not designed or powered to show statistically significant differences between 1,000 mDOR and placebo. Overall, these data are meant to complement the DIMENSION study by generating evidence to better define clinically meaningful change and the relationship between changes in cognition and function.

Speaker 4

Moving now to our PD and AD studies for 1,000 mTOR. The PRECENENCE study is a double blind, placebo controlled Phase 2 study in people with mild cognitive impairment due to Parkinson's disease, designed to evaluate the safety and efficacy of 1,000 mTOR. The LIGHTWEIGHT study is a similarly designed Phase 2 study to evaluate safety and efficacy of Delzenmador in people with mild cognitive impairment and mild dementia due to AD. We expect to announce top line data from precedent for PD in early 2024, ZERVEYER for HD in mid-twenty 24 and dimension for HD and Lightwave for AV both in late 2024. We're very excited for these readouts and if positive, they will help demonstrate a path forward for 1,000 mTOR and importantly bring us one step closer to helping patients.

Speaker 4

Turning to SAGE-three twenty four, which is an investigational positive allosteric modulator of GABA A receptors with significant potential and the treatment of movement disorders like essential tremor. Essential tremor has suffered from a lack of innovation With no new approved treatments in more than 50 years and it has a significant impact on an individual's ability to perform everyday tasks. In the U. S, the total annual estimated economic impact of Essential Tremor is over $100,000,000,000 including medical, loss of employment and disability costs. We are excited about the potential of SAGE-three twenty four in essential tremor, a program that we are developing in collaboration with Biogen.

Speaker 4

As a reminder, the kinetics study demonstrated statistically significant reductions on baseline in upper limb tremor amplitude. PENETIC-two is a 3 month study designed to identify a dose with a safety tolerability profile that is suitable for use of SAGE-three twenty four as a chronic treatment in essential tremor. While the primary endpoint for Kinetic 2 is a change from baseline in upper rim tremor amplitude. We will also evaluate a modified version of the KETRIS ADL to give us directional insight into the effects of SAGE-three twenty four on quality of life and activities of daily living. We have completed enrollment of Kinetic2 and expect to report top line data mid this year.

Speaker 4

Lastly, I'd like to share our excitement around the earlier stage pipeline. In particular, I'd like to highlight 2 novel molecules, SAGE-three nineteen, our extra synaptic GABA A receptor PAM and SAGE-four twenty one, our NMDA receptor PAM. We look forward to sharing more about these programs as they progress. In closing, I am proud of our pipeline efforts this year, I look forward to our future progress and clinical execution throughout a catalyst rich 2024. Now I'll turn the call over for a review of our financials.

Speaker 4

Kimi?

Speaker 5

Thanks, Laura. Our financial results for the Q4 and full year 2020 are detailed in our press release issued this morning. Before discussing specifics, I want to share my excitement on the recent launch of DERZUVA and the opportunity to help so many women suffering with PPD. I also want to thank the entire Sage team for their continued execution and dedication to our mission to support brain health patients. We and Biogen are mobilized with the goal of continued commercial momentum and are jointly supporting the planned launch of XERZUVA with fifty-fifty cost sharing in the United States.

Speaker 5

While we're thinking big about the opportunity, we're executing with a focused approach and plan to scale with success. In addition, we are prepared to execute on a catalyst rich year ahead With multiple expected top line data readouts for 1,000,000 mDOR and SAGE-three twenty four, we're investing strategically in our broader pipeline to have the potential for value creation opportunities for the near, mid and long term. I'll now turn to the financials. Today, we announced collaboration revenue from the initial sales of XERZUVE of 824,000 As a reminder, our reported collaboration revenue is 50% of the net revenues Biogen reports for XERZUVE. Net revenues are recorded when Biogen ships ZERZUVE to the distributors and are not based on the number of prescriptions delivered from specialty pharmacy to patient.

Speaker 5

ZERZUVA net revenues in December 2023 principally represent initial efforts of pairing the channel for the full launch in the Q1 of 2024. Additionally, today we announced milestone revenue of 70 $5,000,000 from Biogen related to the 1st commercial sale of DIRZUVE for the treatment of PPD. We earned the milestone in Q4 and received payment in January 2024. We're not guiding on gross to net today other than to say given the fact that ZERZUVA is a novel medication and the only approved oral treatment for women with PPD, we do not anticipate the type of discounting received for other branded CNS agents. Turning to operating expenses.

Speaker 5

R and D expenses were $64,300,000 in the Q4 of 2023. SG and A expenses were $55,100,000 in the Q4 of 2023. The decrease in both R and D and SG and A expenses Compared to the Q4 of last year, which primarily related to reorganization cost saving measures such as reduced headcount, budgeted expenditures and prioritization of early pipeline programs. We expect that operating expenses will decrease in 2024 relative to 2023. Cost of revenues for ZERZUVA for the Q4 of 20 3 included one time charges in preparation for commercial availability.

Speaker 5

These one time charges included distribution setup fees and charges for the manufacturing network. We do not expect this gross margin trend to continue. Our net loss for the Q4 of 2023 was $32,700,000 and we ended the Q4 of 2023 with cash, cash equivalents and marketable securities of approximately 753,000,000 We are reaffirming that based on our current operating plan, we anticipate cash, cash equivalents and marketable securities Along with a milestone payment received in January, anticipated funding from ongoing collaborations and estimated revenues will support operations into 2026. I'd like to note that we have maintained a strong financial foundation as we enter a catalyst rich year for the company. Before I turn the call over, I want to highlight the scope of our as a growing leader in brain health.

Speaker 5

The launch of XERZUVE demonstrates the culmination of our capabilities, starting from molecule discovery to FDA approval and now commercial launch. We look forward to the year ahead with many exciting catalysts across our pipeline and the continued commercialization of XERUVAN in the treatment of women with PPD. I'll now turn it over to Ashley to handle Q and A with the operator. Ashley?

Speaker 1

Thanks, Kimi. I'll ask that you limit yourself to one question. 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?

Operator

Thank you. Our first question comes from Salveen Richter with Goldman Sachs. Please go ahead.

Speaker 6

Great. Thanks. This is Matt on for Salveen. For the 120 scripts, could you share roughly what the split was between commercial and Medicaid and also between treatment naive and treatment experienced patients? Thank you.

Speaker 2

Hey, Matt. Thanks for the question. Appreciate it. As we talked about on the call, the December numbers represent about 10 days where moms We can't really provide much more color on the 120 scripts. We're happy with that kind of activity and we're really excited that the prescriptions came not only from psychiatrists, but from OBGYNs as well as primary care.

Speaker 2

We don't have all the Patient Journey data in yet, but certainly provide more color in the quarters to come.

Operator

We'll take our next question from Anupam Rama with JPMorgan. Please go ahead.

Speaker 7

Hey guys, thanks so much for taking the question. Yesterday on the Biogen earnings call, they mentioned positive payer dynamics. You guys talked about this, this morning as well. Maybe you could expand on what you're seeing on the experience to date on the payer side And how we should think about that sort of first half sort of payer dynamics? Thanks so much.

Speaker 2

Yes, I'll start Anupam and turn it over to Chris. And thank you very much for the question. It's really important. So as you heard yesterday from Our colleagues at Biogen and we've commented on earlier, we're experiencing very positive payer dynamics. The vast majority Prescriptions, this is even before formulary coverage were paid for, which we highly expected.

Speaker 2

We've been in PPD for a long time. And the fact that Mental health and maternal health are top of minds for payers really provides positive tailwinds in the launch. So we're excited about what we're seeing in terms of reimbursement even before coverage decisions have been made. But Chris, you want to provide more color?

Speaker 3

Yes. We've historically said that to be truly transformational, you have to be accessible. And we've worked hard over the course of the last several years to really establish the unmet need in PPD and to really share the data associated with ZERZUVAY, for the treatment of women with PPD. And we've been able to build on that as we progressed into more formal formulary coverage discussions with payers. As Barry noted in his opening remarks, we've seen initially before formulary decisions were made, commercial and government insurers, particularly Medicaid, actually paying for prescriptions as they flow through.

Speaker 3

And we believe this is really reinforcing of what we've already communicated that there is the potential for ZERZUVE to be a first line therapy for women with PPD without the onerous prior authorizations and complex step edits that could challenge that. We're really excited around the initial conversations that we've had with payers so far.

Operator

Our next question comes Yasmeen Rahimi with Piper Sandler. Please go ahead.

Speaker 8

Hi. This is Jung Gu on for Yasmeen Piper. Thanks for taking our question. For 718, what are the key gating factors and bars across studies to warrant further investments? And for essential tremor, given the competitive landscape, do you need to show as you move into Phase 3 in terms of safety and efficacy?

Speaker 8

Thank you.

Speaker 2

Yes, Yon Gu. So when you're talking about SAGE-three twenty So SAGE-three twenty four is our partnered program with Biogen, gabapam designed for chronic administration for movement disorders initially studied in essential tremor. I'll start and then Laura can talk about the KINEDICT-two study. As we saw Early, we saw statistically significant reduction in tremor amplitude correlated with activities with daily living in Kinetic. What we're looking for in Kinetic 2 is the optimal dose for chronic administration.

Speaker 2

Laurie, you want to talk more about the competitive landscape and what we're looking for?

Speaker 4

Sure. So We learned a lot from KINETIK-one in terms of how we designed KINETIK-two. In KINETIK-one, the dose administered was 60 milligrams and it was administered in the evening. And many patients had sedative effects or somnolence. For designing the Kinetic 2 study, we took that into consideration and did a number of things.

Speaker 4

First, We changed the administration of the drug to the evening, so that the effects of Fondylates and sedation would be less problematic. And we also are exploring a variety of doses, 50 milligrams, 30 milligrams and as titration of 60 milligrams. With that in mind, we feel confident that these data will allow us to identify a dose that has an appropriate risk benefit profile for chronic use in With that said, what we're looking for as for that dose for 324 is a dose that is provides efficacy that's similar to or better than agents that are used currently to treat EP with the safety tolerability profile that's appropriate for chronic dosing in this population.

Speaker 2

And do you want to talk about the competitive landscape? There's really been a positive innovation in central tremor. Do you want to talk about what's out there?

Speaker 4

Yes, it's really incredible. There have not been new All with T type calcium channel blockers. The data from some of these programs has been negative and the programs have been stopped. In other cases, The programs are moving forward with Jazz and Praxis and we look forward to seeing that results.

Operator

We'll move to our next question from Ritu Paral with TD Cowen. Please go ahead.

Speaker 9

Hi, guys. Wanted to ask about plans for the formal PPD launch as you guys see it. On one hand, there was a huge sort of flurry of news reports, etcetera, around first approval. I understand that there was a commercial or a media outreach campaign around that. And I think there's just a concern amongst investors interested in this program that you might be losing momentum essentially As we get further and further out from actual approval and availability, and not pushing the button On something like another media push, especially given what you said about patients themselves advocating for access When we found in our own checks that many OBGYN clinicians are unaware of the drug still amazingly enough, Can you talk about the rationale for and the status of timing of that real commercial launch?

Speaker 9

What aspects you can talk about now, that'll go into it? Why you're waiting, frankly? And If I could sneak another one in another question in just about the free drug program that you passed right now for SIRSUS today. Thank you.

Speaker 2

Yes, Ritu, thanks for the question. So just to be clear, XERZUVE is launched. We received approval As you know, in August for PPD, we had DEA scheduling, which took several months and we and Biogen made Zuzuvi commercially available mid December. We now in January have our full omni channel up and running and our field force deployed. As you heard us say previously, as Kimi said on the call, we're thinking big about the PPE opportunity, but starting with focusing and scaling fast.

Speaker 2

The media attention has continued and the sort of anecdotes and stories have continued well and we're not seeing any slowing at all of momentum. So we're excited by and encouraged by what we're seeing. The patient advocacy groups are certainly encouraged. And As you heard us say, we're beginning to see women with PPD stepping up and advocating. The other important major trends we're seeing, I'll highlight this, our PPD is seen as a serious medical condition and not a moral failing.

Speaker 2

That switch happened relatively fast. The other switch that happened relatively fast, I'm sort of surprised if You've pulled OBGYNs and they're not aware of Zuzuvia. We certainly haven't encountered that. You'd have to sort of be under a rock to not have seen immediate attention, which has continued. But the big trend here is that we're seeing some healthcare providers move from The suspicion of depression and the referral to the diagnosis and treatment and the fact that the prescriptions come equally from Sykes and OB GYN is a good proof point of that trend that we're seeing.

Speaker 2

You also asked Chris, do you want to talk about the free drug program? Yes.

Speaker 3

So let's take a step back and talk about XERZUVE for you, patient access program that we have in place that's been up and running since the launch of the medication in mid December as we've noted. ZERSUV for you has been particularly effective in terms of mitigating patient out of pocket, those with commercial insurance down to 0. Everybody that's enrolled in the program has paid $0 in order to get XERZUVE. So it's been particularly effective in making sure that not only is the medication accessible, but it's also affordable. That's particularly key.

Speaker 3

Think in terms of the free good program, we've got the mechanics in place. If a payer is not particularly going to pay for the medication after a set period of time, we'll actually step in and provide the medication to that patient at no out of pocket. We've seen the vast majority of prescriptions actually B covered prescriptions going forward. We haven't had to actually enact that program significantly reflective of, as I said earlier, The support that we've seen from the payer community around making sure that this medication is available in Flowserve regardless of the fact that patients are either commercial or Medicaid. So we see the ZERZUGRIA for you as a particularly effective program and one that will continue to implement in order to make sure all patients have access to the medication.

Operator

We'll move to our next question from Paul Matteis with Stifel. Please go ahead.

Speaker 10

Hi, this is James on for Paul. Thanks for taking our question. Kind of a similar question there around Of those 50 scripts that have actually shipped and been delivered, what percent are actually paid drug? And it sounds like Just based on your prior answer, it's the majority. And I guess kind of baked into that, just wondering what you're kind of seeing on a time lag basis from when a script is written and to when it's actually given to the patient and how you expect to see that evolve over time?

Speaker 10

Thanks so

Speaker 2

much. Yes, James. Thanks for the question. Let me just take a step back and just clarify kind of the flow. So When we ship drug to a specialty pharma, that shipment to the specialty pharma is the revenue recognition.

Speaker 2

When a prescription is written, it's typically in the electronic medical system. It's automatically sent to a specialty pharma that counts as a prescription. When that specialty pharma then ships the prescription to the patient's home, that's the shipment. So those are the kind of the 3 key metrics. The vast majority of those shipments were paid for, as we said, we don't have we're not providing a specific breakdown, but The vast majority, as Chris already mentioned, it's been paid for not only by commercial, but also by government payers, specifically Medicaid.

Speaker 2

So we're excited by that. We continue to work on the value proposition here. Obviously, Zuzumab is the 1st and only oral medication specifically approved for PPD. Its rapid onset of activity is key to the value proposition. So the sooner mom gets drug, the better off mom is to reattach with family and baby.

Speaker 2

So we're cognizant of that. We had many shipments that were done in 24 to 40 hours. Of course, some took longer. So that's really an engineering issue as we optimize the processes, payers come online and healthcare providers get comfortable with exactly how to get to Zuvi to mom. But again, highly encouraged in the early days.

Operator

We'll move to our next question from Tazeen Ahmad with Bank of America. Please go ahead.

Speaker 11

Hi, thanks for taking my question. With regards to the prescriber base, you've talked about now for a bit, interest coming in from the OBs, in addition to psychiatrists. But how important is it going to be to penetrate PCPs and what is your strategy? Can you just remind us of how the sales force is structured? Does a salesperson just target a particular specialty or are they detailing all three specialties at the same time?

Speaker 11

Thanks.

Speaker 2

Yes, Tazeen, thanks for the question. I'll start and then Chris will provide more color. So again, The fact that literally the about 10 days, ZERZUVE was available in that short period of time, we already saw prescriptions coming in not only from Sykes, but also OBGYNs and primary care is really indicative of the recognition of of PPD as a severe medical condition, not a moral failing and the awareness that our omni channel approach and the media had in raising awareness of PPD. Chris, you want to talk about the sales force targeting omni channel and sort of how we're approaching that?

Speaker 3

Yes, Barry. What I would say first is that What I think we're seeing here is a paradigm shift. Historically, what's happened in the diagnosis and treatment PPD is clinicians have And then they've referred out. What we're actually seeing here are clinicians, the clinicians that we're calling on, the clinicians that we're reaching through omni channel, diagnosing and treating, which is very different than what we've historically seen. In terms of the call universe that we're calling on, we are calling on high prescribing, high volume clinicians with experience in treating postpartum depression.

Speaker 3

It's a mix of OBGYNs, psychiatrists and a handful of PCPs that are all a part of that cohort that we're calling on actively with a sales force. Obviously, we're using omnichannel to broaden our reach and deepen our frequency because believe all clinicians who see women with PPD need to hear the messages that we're delivering and have access to the information that enable them to effectively treat women with PPD as we go forward. In terms of PCPs, what I believe will happen over time is that we'll continue to stand with that first group that we're calling on now broadening to a broader group of PCPs as well as Sykes and OBs as we go forward, but that's to come in time as we move forward.

Operator

We'll move to the next question from Brian Abraham with RBC Capital Markets. Please go ahead.

Speaker 12

Hey, good morning. Congrats on all the progress and thanks for taking my question. Maybe shifting gears to the pipeline. On 718, Can you expand on what you're looking for out of the surveyor study in terms of trends and correlations? And I guess I'm curious how that might influence how you would tweak the DIMENSION study size endpoints population or something else and whether the goal would be for dimension to potentially be registrational for Huntington's.

Speaker 12

Thanks.

Speaker 2

Yes, Brian. Well, first of all, thanks for the congratulations. We really are And I congratulate you on sneaking 5 or 6 questions into your one question. That was good. I'll turn it over to Laura to talk more about it.

Speaker 2

But Before I do, so you talked about daltonamdor SAGE-seven eighteen, which is our fully owned NMDA positive allosteric modulator that we're studying in neurodegenerative diseases. And we're excited to have readouts for both Huntington's, Parkinson's and Alzheimer's this year. Strategically, as we talked about And Laura will get into specifics. As we've designed the series of Huntington studies, we've done so recognizing that Huntington's is a rare orphan disease. We've done so in a way that if the data are positive and let me emphasize data matter here that we believe that we have a package to work with regulators on speeding Delta Amdoor to help those suffering from cognitive disorders in Huntington's.

Speaker 2

The Parkinson's and Alzheimer's are truly Phase 2 studies where they're learning studies that gives us better support understanding of designing the Phase 3s. But you want to Laurie, you want to talk more about the dimension in surveyor studies and how they fit together?

Speaker 4

Sure. So as I mentioned in the introductory remarks, surveyor is a study that really was designed to serve two purposes. 1st, to compare the degree of cognitive impairment in patients with Huntington's disease to healthy volunteers. And that's important so that we can understand the clinical meaningfulness of the treatment effect that we see in our both for surveyor and dimension. The second purpose of the study was to evaluate how changes in in cognition tracked with changes in function.

Speaker 4

And this is important to provide supportive evidence both to regulators and to other stakeholders about the relationship between these two metrics. Of course, when we get the surveyor data, we will look at it very carefully. If there are suggestions in that data that there would be a benefit to changing something in the dimension design, we would do that. It's important to note that those changes would be limited to ordering of endpoints, not changes related to adding new end are doing something that would really prolong the study length.

Operator

We'll move to our next question from Ami Fadia with Needham and Company. Please go ahead.

Speaker 13

Hi, this is Poona for Ami. Thank you for taking our question. Just had a question about the bridging program. Could you please talk about it and what type of utilization you're seeing with this program? Should we be expecting use of this program as you complete your peer negotiation?

Speaker 2

I'm not sure I understood the bridging program?

Speaker 4

Yes. I'm not sure

Speaker 3

I understand the question. Yes, patient support, I believe. So what we said is that Zuvi for you is a program that's in place that's largely designed to make sure that We're mitigating patient out of pocket and we talked about that being able to mitigate the vast majority of these patients that are commercially insured down to a $0 out of pocket co pay. We also make sure that patients who fundamentally fall in this functionally uninsured group of patients, patients that you would Call in other organizations, bridge program patients are actually able to access the medication. So we have that resource in place to actually make sure that those patients don't fall through the system that they can actually get access to the medication.

Speaker 3

But as we also said, the vast majority of patients that are flowing through right now are actually covered patients, whether they are commercially insured or Medicaid patients, which again is a very good sign or signal from payers around the support that they're providing for women with PPP.

Speaker 2

Yes. Important to keep in mind that as Chris has mentioned many times, we believe that if a prescription is written for a woman suffering from BPD that we want to make sure that that woman had drugs. So in our case, it's not really a bridge because it's a 14 day complete course of treatment, not a bridge to a chronic medication.

Operator

We'll move to our next question from Laura Cheekam with Wedbush Securities. Please go ahead.

Speaker 4

Hey, good morning guys. Thanks for the question. I had one on Surveyor and Dimension and just kind of following up. I was wondering if you could talk a little bit more about the endpoints. And specifically, I'm trying to understand, while you're using the primary endpoint as the Huntington's Cognitive Assessment Battery.

Speaker 4

I'm trying to better understand how the high def scale fits in here. And I guess, Laura, based on your comments, could that become a primary endpoint?

Speaker 2

Thanks. Thanks for the question, Laura, on Dels and ImmTOR. I'll turn it over to Laura to answer.

Speaker 4

Yes. Thank you, Laura. As you noted, the HECAP is the primary endpoint for the DIMENSION study. We have also included the high def measure, which is a measure of function and it's a patient reported outcome that Sage has developed specifically for this population. We have developed and validated that measure, and it would be appropriate to be in an application to support the efficacy profile of SAGE-seven eighteen or dosing mDor.

Speaker 4

At this point, we will Take what we learned from the surveyor study and make a decision about what the proper endpoints should be for DIMENSION, Keeping in mind, of course, that the Huntington's disease cognitive assessment battery is a battery that has been developed by experts in the field to measure domains of cognition that are impacted by Huntington's and actually reflect some of the domains that we believe cells and mTOR will improve. So we have no reason to believe that that endpoint will not be appropriate or sufficient, but the high def is also a good endpoint that will add additional information about how Dalzandemdor affects patient functioning?

Speaker 2

Yes. And Laura, it's a really great question. As you're well aware, With DALZANENDRA, we're forging new pathways here. There's not been a medicine specifically approved for cognitive impairment in Huntington's disease. It's a really huge Unmet need and given the orphan nature, again data matter here, but we believe there'll be tremendous flexibility in working with the package here.

Operator

We'll move to the next question from Nina Beatrizio Gar with Deutsche Bank. Please go ahead.

Speaker 13

Hey guys, thanks for taking my question. I just wanted

Speaker 5

to go back to the XERZUVA launch. So just looking at some of the 3rd party script vendors, so specifically IQVIA. It looks like there's a decently high capture rate versus what you've reported in terms of dispensed So I'm just wondering if you can kind of comment on that and if we should look at those 3rd party vendors moving forward. And if you can talk at all about what you've been seeing kind of on a week over week perspective on scripts so far this quarter, that'd be great too. Thanks.

Speaker 2

Yes, Anita, let me start. I'll turn it over to Kimi to talk specifically about IQVIA. So again, What we've reported out in the Q4 was roughly 10 days of commercial availability, where moms could access healthcare providers to advocate for XERZUVE. We're not really talking about the data specifically in January February other than the fact that we're seeing positive trends I'll continue. But Kim, you want to talk more about the IQVIA data?

Speaker 5

Sure. The launch is trackable through IQVIA. However, the data may not provide a complete picture of What you see in the data is shipments to patients, not prescriptions. And then data does lag by about a week. The data I'd say is directionally correct, but not precise.

Speaker 5

There are things like free goods that might not be captured in certain cases or there might be specialty pharmacies we contract with that might not be covered. So again, I'd say the data is directionally correct, but not precise.

Operator

We'll move to our next question from George Farmer with Scotiabank. Please go ahead.

Speaker 14

Hi, good morning. Thanks for taking my question. The back still on the ZERZUVE script, I mean, Biogen reported $2,000,000 in sales in December, and you guys are reporting 120 scripts written over the same period. Just kind of back of the envelope math suggests that all those scripts generated revenue. Are we thinking is that the right way to think about this?

Speaker 14

And maybe you can comment on Whether there were other scripts that didn't get filled, and how many perhaps there were some other scripts that were part of the free drug program as well. Is that the right way to think about this?

Speaker 2

Yes, George, I'll take that and thank you question. So it's important. Let me reiterate sort of the supply chain, if you will. When specialty pharmas The stock drug, they put an order in. When that order is sent to the specialty pharma, that's where revenue comes in.

Speaker 2

So revenue is drug into specialty pharma. The drug gets pulled from specialty pharma when a healthcare provider and this is done mostly electronically, write to script, the script automatically goes to specialty pharma who does insurance verification, other backend processing. And when all that's done and it can happen in 24 to 48 hours, that prescription then is shipped to the patient. The IQVIA data that Kimi talked about are those shipment data. So that's what you can see.

Speaker 2

And we're providing color on script, which as Chris mentioned we'll provide for the 1st couple of quarters, but likely we'll drop that metric. So it's not a direct correlation. Now The fact that we saw 120 scripts is exciting and encouraging in a very short period of time in December.

Operator

We'll move to our next question from Sumant Kulkarni with Canaccord Genuity. Please go ahead.

Speaker 15

Good morning. Thanks for taking my question. Now that you probably had some patients finish their 14 day course of therapy, what sort of real world feedback are you getting from on how quickly XERZUVA may be working in the real world and how patients might be feeling after the treatment and if there are any unexpected positives or negatives we've seen post dosing?

Speaker 2

Yes, great question. So the early feedback we've heard from the field is positive and we're highly encouraged by the anecdotes of the early patient successors. Of course, bunch of anecdotes don't add up to data. We're also pleased that we're hearing back from Many healthcare providers including OBGYNs, primary care and Sykes about ZERZUVE. And in general, what we can say is in the real world, ZERZUVE is forming as we saw in clinical trials and that is taken at night rapid onset of options, 50 milligram is being prescribed and patients completing the 14 day short course treatment.

Speaker 4

Thanks. Thank you.

Operator

We'll move to our next question from Akash Tewari with Jefferies. Please go ahead.

Speaker 11

Hi, this is Phoebe on for Kosh. Thank you for taking our questions. Biogen mentioned on their Q4 call yesterday that they aren't sure if the initial set of prescriptions Given that the survey was approved in August and then only launched in December, do you feel like demand may be a bit choppy out of the gate and has there been Or has there been any increased demand in January? Additionally, just wondering why you didn't guide to ZERVAE ramps for 2024 and do you plan to guide in later quarters? Thank you.

Speaker 2

Yes, Phebe, thanks for the couple of questions. I'll start, I'll ask Chris to comment more and then Kimmy can talk about guidance. So The TPD is not a warehousing effect type disease. We're seeing tremendous demand continue into the early part of 2024. So we can confidently say there's no warehousing here.

Speaker 2

We're seeing demand continue. And the numbers, while encouraging, are really small relative to the 500,000 women A year potentially suffering from PPD. So there's a long way to go to help many of these women. Chris, do you want to talk about through the early launch dynamic and then maybe Keith can talk about guidance?

Speaker 3

So what we're hearing from clinicians out of the gate and Barry touched on it in his opening remarks, we're seeing strong positive performance Coming from XERZUVE in and around prescriptions, prescribing patterns, patient support and coverage, those are all areas that we've talked about significantly. But again, specifically around physician utilization of the medication, we're seeing balanced prescribing across physician types, OB GYNs and psychiatrists with a core group PCPs that are also writing this medication as well too. Those clinicians that actually have women in front of them that are presenting in the moment with the signs and symptoms of PPD. These are not patients that have been waiting for the medication for a sustained period of time as you might see in other categories. So we really believe here and as Barry said that This is a category where there is not warehousing effect and we're going to continue to make sure that we do all that we can through our sales organization and through omni channel efforts in particularly digital to provide physicians with the education, the information and the support to prescribe XERZUVA in the moment when these women come through their office.

Speaker 2

Yes. And before Kimmy jumps in with guidance, let me Phebe, let me highlight something that Chris said earlier on. We're early in the launch, but we've already seen the paradigm shift from a healthcare provider suspecting depression and referring to a healthcare provider diagnosing and treating. We're really in launch. So that's already a paradigm shift we're seeing among these healthcare providers prescribing.

Speaker 2

That's highly encouraging.

Speaker 5

On the revenue guidance to start with, we're pleased about the encouraging early launch of as you've heard from our call, but we believe we need to take some additional time to better understand the dynamics around the uptake. We plan to communicate additional updates related to the commercial of Zazuve in due course.

Operator

We'll move to the next question from Yatin Suneja with Guggenheim. Please go ahead.

Speaker 16

Thank you for taking the question. Specifically on the UPNIC precedent study, so the primary endpoint is the Bechdeler Intelligence Could you help us understand how like what is the relevance of this scale? Number 1, What do we see from a placebo perspective for this study? I understand maybe you're not willing to go there and tell us what data you would like to see, but just help us understand how placebo performed on this scale so that we have at least a baseline? Thanks.

Speaker 2

Thanks for the question on dows and mDOR and the precedent study. Laura, you want to take that?

Speaker 4

Sure. So With the precedent study, we included the WAIS-four coding as the primary endpoint based on information we had gotten earlier in our development program for Delz and Emdoor. As I mentioned earlier, in the Delz and Emdoor program, we conducted small probe studies in Alzheimer's, Parkinson's and Huntington's disease. And in each of those studies, we saw signals of efficacy in cognitive domains of executive function and learning and memory. And the WAIS 4 coding was a scale that we used in those early studies to detect that treatment difference.

Speaker 4

So what we are doing now in the precedent study is using that as a primary endpoint, recognizing, of course, that it is not clear whether that could be a

Speaker 16

limiting endpoint.

Speaker 4

So the study also includes a number of other measures of cognition, including the MoCA and the SCOPA COG. And so we will be looking effects on those endpoints to make decisions about moving forward.

Speaker 2

And Laura, if I can

Speaker 6

add just one thing. I think Across all these studies, it's important to recognize that we are looking for an improvement upon baseline, not necessarily a slowing of and I think that will also factor into how we look at the differences versus placebo.

Operator

We'll move to the next question from Vikram Parikh with Morgan Stanley. Please go ahead.

Speaker 8

Hi, good morning. Thanks for taking our question. We had one follow-up on your initial read of prescribing behavior. So I believe you mentioned in your opening remarks that there were certain providers who had written multiple prescriptions for XERZOVATE in

Speaker 4

the 1st 10 days of

Speaker 8

the launch. So we were wondering if there are any common characteristics across these providers or their patient bases that stick out to you? And more generally, if this gives you a read on how concentrated or not the prescriber base for ZERZERVIA could be throughout 2024? Thank you.

Speaker 2

Yes. Thanks for the question. I'll take that and I'll ask Chris to add if there's any additional color. So we're actually seeing broad prescribing across the United States Among, as we said, psychiatry, OBGYNs and small numbers, but primary care. I don't know that there's trends that are indicative of multiple prescribers other than a prescriber that we assume had a positive experience, sees another patient suffering from PPD and believes that Zizuve is the right drug to reach for.

Speaker 2

As you know, our goal is for Zizuve to be the first line treatment for women suffering from PPD And we're excited and encouraged by the early progress to date.

Operator

We'll move to our next question from Mark Goodman with Leerink. Please go ahead.

Speaker 17

Yes. Good morning. Two questions. First for 324, can you remind us how long the drug is active such that taking at night will still have activity throughout the next day? Then a question just on 718.

Speaker 17

Can you talk about the rationale for using the oxysterol in Parkinson's? I understand that Huntington's patients have low levels, But I didn't understand why it makes sense in Parkinson's. Thanks.

Speaker 2

Yes. I'll quickly take the SAGE-three twenty four question and ask Mike to comment On 718, so the half life of 324 is sufficient for coverage when taken at night for the next day. We're not worried about that. We believe that the drug effect will last multiple days actually. So we're really trying to get to a steady blood serum level that translates to a steady level in the brain.

Speaker 2

Mike, do you want to Talk about SAGE-seven eighteen?

Speaker 6

Yes. And I think the point when we're thinking about SAGE-seven eighteen and its role as a modulator of NMDA receptors While we gained insight from the endogenous modulator 24S hydroxycholesterol, we've also done quite a bit of work with SAGE-seven eighteen and other similar molecules that we've worked on to show that it does not require there to be low levels of 24S for say, so 18 and some of the molecules to work. They work on different ways of impacting NMDA receptor function. So we've been able to show that if you have hypo function due to a genetic change, a pharmacological change, Any way that you have a loss of NMDA receptor function, you can rescue those deficits with molecules such as HSA-eight thousand seven hundred and eighteen. So in the context of Parkinson's Alzheimer's, We believe that there is a strong rationale for NMDA receptor dysfunction, even if the proximal mechanism is not related to oxysterol changes per se.

Speaker 6

And again, that's why we've designed the 718 program to look at different patient populations where we think that there's an underlying cause of NMDA receptor impairment regardless of the specific mechanism driving that change.

Operator

Thank you. That will conclude the Q and A portion of today's call. With that, I will turn it back over to Mr. Green for closing remarks.

Speaker 2

Thanks, Taryn, and thanks everyone for joining us this morning to review our results for the Q4 and full year 2023. As we look ahead to the ongoing launch of XERZUVE and enter a catalyst rich 2024 with multiple data readouts expected,

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Earnings Conference Call
Sage Therapeutics Q4 2023
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