Sage Therapeutics, Inc.

Good morning. Welcome to Sage Therapeutics' first quarter 2021 financial results conference call. Currently, all participants are on a listen-only mode. This call is being webcast live on the investor and media sections of Sage's website at sagerx.com. This call is property of Sage Therapeutics and recording and reproduction and transmission of this call without the express written consent of Sage Therapeutics is strictly prohibited. Please note this call is being recorded. I would now like to introduce Jeff Boyle, Vice President of Investor Relations at Sage.

Good morning. Thank you for joining Sage Therapeutics' first quarter 2021 financial results conference call. Before we begin, I encourage everyone to go to the investor and media section of our website at sageRx.com, where you can find the press release related to today's call, as well as the slides that contain supplemental details. I'll 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 actual results may differ materially. Please consult the risk factors discussed in today's press release and in our SEC filings for additional details. We'll begin the call with prepared remarks by Barry Green, our Chief Executive Officer, who will provide an overview of accomplishments during the quarter and some general context. Barry will then be joined by Steve Kane, our Chief Medical Officer, who will review recent clinical progress, and Kim Iagucci, our Chief Financial Officer, who will review first quarter financials and discuss financial guidance. We'll be joined for the Q&A session on the call by our Chief Research Officer, Jim Doherty. And with that, I'll turn the call over to Barry. Barry? Thanks, Jeff. And thank you, everyone, for joining us this morning. As we pass the one-year mark of the unprecedented public health crisis created by the COVID-19 pandemic, I'm extremely optimistic that we're turning the corner and containing this devastating impact the virus has had on society. However, and this is critically important, there is a hidden pandemic, the brain health pandemic. And while more and more is coming out about this pandemic, there's a long way to go. Indeed, as we know, during the COVID pandemic, we've seen rates of depression in the U.S. alone increase fourfold, while suicidality among adults has nearly doubled. These will likely affect the world for years to come, broadening the unmet need and further exposing the urgent need for novel brain health medicine. And I'm very proud of the ongoing efforts at SAGE to make medicines that address the very real crisis in brain health. I'm pleased to report the significant advances we made over the last quarter across our depression, neuropsychiatry, and neurology franchises as we continue our mission to become the leading brain health company and a top-tier biopharmaceutical company. I believe the progress we've made in the first quarter of 2021 sets up for short, medium, and long-term value creation opportunities as we further advance our deep SAGE-invented organic pipeline. At SAGE, we believe we have the potential to transform the lives of millions of people with brain health disorders who are in need of new, innovative therapies by modulating the GABA and NMDA pathways. Now, by understanding endogenous receptors, applying our unique chemical innovation to neuroactive steroids, including oxysterol chemistries, we've created novel therapeutics designed to modulate these pathways in highly specific and highly tailored ways. We currently have three programs in late stage development with four ongoing phase three trials, all of which are on track to read out this year. Additionally, we have four mid and early stage programs in clinical development, and we're committed to the goal of developing two or more high quality INDs per year starting in 2023. In particular, This quarter, we were thrilled to report positive top-line data from our two lead programs, Zatranilone, the lead program in our depression franchise, and SASE324, the lead product in a neurology franchise. In March, we reported continued positive 12-month data from the 30-milligram cohort and interim data from the 50-milligram cohort of the ongoing Phase III open-label shoreline study, evaluating the safety, tolerability, and need for repeat dosing of the Zoranilone in adults with major depressive disorder. The 30 milligrams showed that approximately 70% of participants had a positive response to an initial two-week treatment and required at most one additional Zoranilone treatment during the 12-month study period. And after the initial two-week Zoranilone treatment, more than 70% of patients who received 30 milligrams and 80% of patients who received 50 milligrams achieved positive response at day 15. When we embarked in the landscape program, our goal was to develop a rapid-acting, short-duration, durable, treat-as-needed option, and we believe the data from Shoreline support this potential product profile. Moving to the late-stage program in a neurology franchise, Sage 324, we recently announced positive Phase II data from our kinetic study of Sage 324 in essential tremor. To remind you, what we were looking for from this study was a reduction in tremor amplitude of 30% to 50% that was sustained for the full study period. In other words, no loss of effect or tachyphylaxis. We were also looking for no adverse event surprises. The kinetic study achieved our objectives and more. We saw a statistically significant reduction from baseline in the Tetris Item 4 upper limber tremor score at day 29 compared to placebo. The safety profile is generally consistent with previously reported data for SAGE-324. And just to be clear, we believe SAGE-324 has tremendous potential in essential tremor. The results from this study, a statistically significant reduction in tremor and a statistically significant correlation in tremor reduction to activities of daily living are meaningful indicators that further development and optimization of dosing with SAGE-324 are important next steps as we think about fine-tuning the therapeutic index and commercial profile for its important potential therapy. And to further set some context for the kinetic study, we designed the study to evaluate what we knew was the high end of the dosing range. We were looking for a big effect on tremor with no surprise adverse events. We administered the dose in the morning with the understanding patients would experience somnolence. Our goal was to gain an understanding of the PKPD characteristics for stage 324 and identify plasma levels correlated to efficacy. We look forward to presenting these data at a later time and in working with our collaborator at Biogen to optimize next steps for the continued development of stage 324 to get to a dose and frequency for phase 3. At this time, we don't think additional formulation work is necessary. We're confident the work proposed to be done in a planned phase 2B trial will result in a dose and frequency designed to optimize benefit-risk in further development for essential tremor. This quarter also marked progress across our neuropsychiatry franchise, where we are evaluating SEDG 718, a first-in-class NMDA receptor PAM, as a potential oral therapy for cognitive disorders associated with NMDA receptor dysfunction. I'll provide an update on the positive data from the Phase II paradigm study in a moment, but I want to confirm that we intend to initiate a Phase II trial in Huntington's disease later this year, as an important step towards pursuing the initial indication for SAGE 718. Assuming, of course, the data continues to support that path. Recall, we previously reported encouraging phase one open label data in measures of executive function in patients with HD. And this, combined with consistent positive data on tests of executive function we saw in paradigm study, as well as our discussions with key opinion leaders, patients, and regulators, to support Huntington's disease as a target for our initial indication. Now, on Paradigm, the interim data cut showed patients demonstrated improved performance from baseline on multiple tests of executive function over 14 days of treatment, results that are very similar to previous results in healthy volunteers and patients with Huntington's disease, and further support development of SAGE 718 for cognitive dysfunction. Steve will provide additional details on these exciting data But it's clear that SAGE 718 has the potential to become a very important treatment for multiple diseases, for cognitive dysfunction, or the need for better executive function as a driver of disability. In addition to HD and further work in Parkinson's, we intend to evaluate several other paths forward with SAGE 718, including cognitive dysfunction associated with Alzheimer's disease, with the ongoing luminary study in Alzheimer's disease on track to read out later this year. This means that by later this year, in addition to initiating a placebo-controlled phase two for Huntington's disease, we expect to have completed all three data readouts with Sage 718 as we accelerate our efforts to move this program forward. With that, I'll turn the call over to Steve for more detail on the data we reported this quarter, as well as our additional clinical programs.

Steve? Thanks, Barry, and good morning, everyone. We've made great progress across all three franchises to date, including positive data from our Zoranilone and SAGE-324 programs, as Barry mentioned, as well as positive results with SAGE-718 and the Paradigm Study. Since our path towards ADHD as the initial indication has been supported further by the results of the Paradigm Study is the news of the day, I'd like to spend the majority of the next several minutes reviewing the progress in our neuropsychiatry franchise and our vision for further development of SAGE-718 our NMDA receptor PAM in development as a potential oral therapy for disorders where cognition is one of the main drivers of disability, including the very encouraging results from Paradigm we're announcing today. Before I get to the Paradigm results, and given the broad spectrum of potential indications for our NMDA program, we thought it'd be really important to first level set and ensure that we clearly define what we're talking about when we use the word cognition. Cognition can be defined as the sum of all of our mental abilities, a fairly abstract definition, but two key domains of cognition are executive function and learning and memory. Executive function is the conductor of the brain's orchestra. It controls our ability to plan, make decisions, and also adjust to the challenges or new situations as they arise. It's also the core skill that allows us to react and adapt in real time to navigate our constantly changing and evolving environments. Executive functioning touches so many aspects of what we do on a daily basis, and it becomes very difficult to operate independently as executive function declines, for example, in Huntington's and Parkinson's diseases. You're probably also familiar with the concept of learning and memory, which is the ability to take in information, file it away in our brain's internal organization system, and then retrieve it at the appropriate time and place. What we don't expect to see based on our mechanism of action are any impacts, positive or deleterious, on performance metrics like attention and psychomotor speed. So what's so exciting about SAGE 718 is that beginning with healthy volunteers and then patients with Huntington's disease, we were looking for and saw improvements in executive function. And now in patients with Parkinson's disease, SAGE 718 has shown a positive impact on multiple domains of cognition, including executive function and learning and memory, while not altering simple attention or reaction time, which are performance but not true cognitive attributes, typically enhanced by amphetamines. To our knowledge, there's nothing to date in clinical development that has generated data suggesting this kind of profile, the potential ability to augment key cognitive domains without the challenges often associated with other approaches. Turning that to paradigm, These data reinforce and extend previous cognitive findings in the new patient population, Parkinson's disease. Today, I'm going to provide a brief summary of what we've seen with this initial data cut. To date, there have been eight patients aged 50 to 75 years old with mild cognitive impairment due to Parkinson's disease who received Sage 718, three milligrams daily for two weeks. Similar to earlier findings of healthy volunteers, as well as in patients with Huntington's disease, Patients in the PARADIGM study demonstrate improved performance from baseline on multiple tests of executive functioning over 14 days of treatment. It's also important to note that in the study, SAGE718 had no impact on attention in psychomotor speed, signals that are typically associated with other approaches, like stimulus. Emerging signals from the PARADIGM study also suggest that there are improvements in performance on tests of learning and memory over a similar timeframe. An important finding is Sage 718 is currently being evaluated in another Phase II open-label study, the Luminary study, in patients with mild cognitive impairment and mild dementia due to Alzheimer's disease. As in previous studies, Sage 718 was generally well-tolerated. Specifically, there were no serious adverse events and no treatment-emergent adverse events were determined to be related to Sage 718. It's worth repeating. we have not seen any serious adverse events or treatment emergent adverse events related to SAGE 718 across all studies. SAGE 718 continues to demonstrate in these early trials a consistent and promising profile as a potential treatment to address multiple aspects of cognitive impairment. And so, I'm excited by the performance of SAGE 718 in the PARADIGM study, and we intend to activate a four-week dosing arm in the PARADIGM study to gather additional data in the PD patient population and inform next steps. The data from Paradigm also reinforce our decision to move forward in Huntington's disease, where stage 718 has performed similarly in an earlier phase one trial. So we're planning to advance into a double-blind, placebo-controlled phase two study in Huntington's later this year, and if positive, will bring us one step closer in pursuing the initial indication for stage 718. We'll provide greater detail on study design as we get closer to trial initiation, but what I can share is that we'll be studying a similar battery of cognition tests as previously studied with the goal of sustained changes out to three months. HD is an orphan disease estimated to affect more than 20,000 people in the United States, and cognitive deterioration is one of the earliest and most disabling features of this devastating neurodegenerative disease. Cognitive impairment may begin years before a formal diagnosis, and with no available treatment to slow the progression of decline, leading to loss of independence, the unmet need for these patients is significant. We have very high ambitions for our NMDA platform, but the ability to target conditions where cognitive deficits really impair patients' ability to lead independent lives. In addition to Sage 718, our Neuropsych franchise also includes Sage 904, an NMDA receptor PAM product candidate being evaluated as a potential oral therapy for other disorders associated with NMDA hypofunction This is currently an ongoing phase one study that we plan to complete this year. In stage 421, an oral NMDA PAM is being evaluated for potential use in neurodevelopmental disorders and cognitive recovery and rehabilitation, which we expect to advance to preclinical studies later this year. Turning now to our neurology franchise. We recently announced positive top line data from our phase two double-blind kinetic study of Sage 324 60 milligrams in essential tremor. In earlier open-label studies, Sage 324 demonstrated pharmacologic characteristics we believe are well-suited for development opportunities, not only in essential tremor, but also in epilepsy and Parkinson's disease. In the study, 69 patients aged 18 to 80 years old were randomized one-to-one to receive either 60 milligrams Sage 324 or matched placebo once daily in the morning for 28 days with a follow-up period of an additional two weeks. The trial evaluated treatment as age 324 at the high end of the dose range and the daily dose could be down titrated to 45 or 30 milligrams if 60 was deemed to be not well tolerated. The primary endpoint in the study was change from baseline compared to placebo on day 29 An upper limb tremor score is measured by item 4 of the Tetris Performance Subscale, a physician-administered scale designed to provide an accurate, comprehensive assessment of essential tremor motor symptoms that has been shown to correlate with Tetris activity of daily living. We are pleased the study met its primary endpoint, a statistically significant reduction in Tetris item 4 upper limb tremor score from baseline at day 29 in the pre-specified full analysis set compared to placebo with a p-value of 0.049, which corresponds to a 36% reduction from baseline in upper limb tremor amplitude in patients receiving SAGE-324 versus a 21% reduction in patients receiving placebo. In patients with more severe tremor at baseline, with a median Tetris performance subscale upper limb tremor item four score of 12 or higher, stage 324 demonstrated a statistically significant reduction from baseline in Tetris item 4 upper limb at day 29 compared to placebo with a p-value of 0.007 that corresponds to a 41% reduction from baseline in tremor amplitude at day 29 compared to an 18% reduction for placebo. 52% of patients who received stage 324 down titrated in dose as allowed by the study protocol, and discontinuations were noted in 38% of patients receiving SAGE-324. Adverse events were generally consistent with the safety profile of SAGE-324 seen to date and with other GABA PAMs. Treatment-emerging adverse events that occurred in 10% or more of patients in the SAGE-324 treatment group and a rate at least twice as high as that of patients in the placebo group were somnolence, dizziness, balance disorder, diplopia, dysarthria, and gait disturbance. These data exceeded our expectations for the 60 milligram dose, and we're focusing on optimizing dose and frequency for the ongoing development of stage 324 in essential tremor, along with our collaborators at Biogen. We're encouraged by the potential of stage 324 for essential tremor, a disorder with a high unmet need. As Barry mentioned, we're confident in our ability to develop a dose and frequency regimen for further development in the chronic treatment of essential tremor. Beyond SAGE-324, our neurology franchise includes SAGE-689, a potent investigational product with rapid absorption, good viability, and solid formulation flexibility with potential in areas of high unmet need, including acute agitation, mania, or even migraine. We're also planning to advance SAGE-319, an oral extrasynaptic GABA-A receptor preferring PAM to preclinical studies for potential use in disorders of social interactions. Turning to our depression franchise, in March, we reported continued positive data from our Phase III Shoreline Study, which was designed to naturalistically follow patients with major depressive disorder and evaluate the safety and tolerability of Zoranilone 30 milligrams in adults for up to one year. As a reminder, the study was amended in May 2020 to include a 50 milligram dose of Zoranilone. Data reported showed that after the initial two-week Zoranilone treatment, More than 70% of patients who received 30 milligrams and 80% of patients who received 50 milligrams achieved positive response by day 15. In the 30 milligram cohort at day 15, the mean change from baseline was 15.2 points and 73.5% of patients achieved response, and 40% achieved remission as measured by a HAND-D score of less than or equal to 7. Approximately 70% of participants with positive response to an initial two-week 30-milligram treatment required at most one additional Xoranilone treatment during a 12-month study. In the 50-milligram cohort, at day 15 of the initial treatment course, the mean HAMD change from baseline was 16. Eighty-point-five percent of patients achieved response, and 43.2 percent achieved remission. Of the 489 patients in the 30-milligram cohort continuing in the study, 42.9 percent used only the single initial Xoranilone course. 25.6% used a total of two courses, 11.9% used a total of three courses, 10.8% used a total of four courses, and 8.8% used a total of five courses. In both cohorts, Zoranilin was generally well tolerated with an adverse event profile consistent with data reported earlier. We're also announcing plans to reopen enrollment in the 50 milligram cohort of the Shoreline study, increasing the target enrollment to 500 patients. We remain on track to report top-line one-year data from Shoreline 50 mg in late 2021, with data from the expanded 50 mg cohort expected in 2022. Additionally, we plan to offer patients from the CORAL study the ability to roll over into the Shoreline study following completion of the CORAL study. These extensions allow SAGE to collect additional long-term data on patients treated with Zoranil and 50 mg. And finally, we remain on track to report top-line data from the Phase III waterfall study in the first half of this year and from Phase III coral and skylark studies by the end of the year. This was an important quarter for SAGE, marked by progress across our entire pipeline. We're excited about the year ahead, with several milestones in front of us, including multiple Phase III readouts expected. We believe this progress positions us well to continue to expand and accelerate our pipeline in order to advance our mission of making medicines that matter. I'll now turn the call over to Kimi for a review of the financials.

Kimi? Thanks, Steve. Let me start by congratulating the SAGE team on another great quarter as a result of their commitment, determination, and execution. We're off to a great start in 2021, reporting positive data from three trials, with another seven, including three pivotal trials, on track to read out later this year. As a reminder, this is the first full quarter of our transformative collaboration with Biogen for Zoranolone in Stage 324. This collaboration includes 50-50 costs and profit sharing for Zoranolone in Stage 324 in the United States. By design, the collaboration provides financial and operational flexibility enabling us to potentially expand and accelerate not only our near-term development of Xurana Loan and Sage 324, but also increase investment in our wholly owned products and accelerate our pipeline. So now let me walk through the highlights of our first quarter financials and then close on some thoughts on our financial guidance. Revenues were $1.6 million in the first quarter from the sales of Xuresa. That was compared to $2.3 million for the same period of 2020. We remain committed to moms, their families, and all those impacted by PPD. Our targeted commercial efforts aim to help moms with PPD who may benefit from treatment with Zorresso gain access. Selling general and administrative expenses were $40 million in the first quarter, compared to $70 million for the same period of 2020. The decrease in SG&A expenses was primarily due to the restructuring that the company underwent during the second quarter of 2020. Research and development expenses were $58 million in the first quarter. That was compared to $64 million for the same period of 2020. The decrease was primarily a result of the $22 million reimbursement by Biogen related to the ongoing Xeranilone and CH324 clinical programs and offset by an increase in spending on our waterfall and coral studies. Going forward and prior to launch, we expect R&D and SG&A expenses related to Xuranolone and SAGE 324 will represent approximately 50 percent of total collaboration program costs, regardless of whether SAGE or Biogen performs the work. Essentially, this sharing of expenses establishes a new baseline for SAGE, representing a lower net investment for spend on Xuranolone and SAGE 324. Collaboration spend will increase as the programs advance, but will continue to be shared with buyers in 50-50 in the U.S. Additionally, this allows us to further invest in our wholly-owned pipeline, including stage 718 and our discovery engine. We reported a net loss of $96 million for the first quarter of 2021. That was compared to $127 million for the comparable period of 2020. Finally, we continue to maintain a solid financial foundation, ending the first quarter of the year with $2 billion in cash, cash equivalents, and marketable securities. We do not expect any milestone payments from collaborations during 2021 and anticipate ending the year with a cash balance of more than $1.7 billion. The cash on hand, in addition to the ongoing cost sharing with Biogen, will allow us to work to expand and accelerate the pipeline and continue to invest thoughtfully sequencing assets we believe will create near, mid, and long-term value creation opportunities for our stakeholders, with the potential, if we're successful, to positively impact more than 450 million people worldwide. I'll now turn it over to Jeff to handle Q&A with the operator. Jeff?

Thanks, Kimmy. Before I turn it over to the operator, 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. Operator?

Thank you. As a reminder, to ask a question, you will need to press star 1 on your telephone. And to withdraw your question, just press the town key. Please stand by while we compile the Q&A roster. Our first question will come from the line of Salveen Richer from Goldman Sachs. You may begin.

Hi, everyone. This is Andrea on for Salveen. Thanks for taking the question. Maybe just one on this additional four-week dosing cohort for the paradigm study, just if you could provide a little bit more color on what you're looking to understand there. Thanks so much.

Yeah, Andrea, I'll start out and then turn it over to Jim for additional details. So you're asking about SAGE-718. We're really excited by the Neuropsych franchise and SAGE-718, our first sort of NMDA program. receptor modulator in clinical studies. And as we talked about in the call, we're very excited by the forward progress into Huntington's disease as our initial indication and the continued efficacy and safety profile we're seeing with SAGE-718 through the luminary data that we reported out today. So all in all, we have a very robust package. In doing drug development, we're looking to learn more and more as we advance SAGE-718. And maybe Jim can talk about some specifics with the four-week program or four-week study. Yeah, absolutely. Thanks, Barry. Yes. So, of course, as Barry said, we're very excited about the potential for SAFE718 and for the NMDA platform in general. And I think one of the things you're hearing today from Steve is that we're seeing consistent types of responses across multiple patient populations now. So some of the design in the study for Paradigm was to keep things as close as possible to what we had done previously. So we're only varying patient population. And so because of that, the design for Paradigm was quite similar to what we had done before, a two-week dosing period. Given the results that we're seeing today and given the investment that we've made, made to get the trial to this point. As we've done in the past, we're trying to be efficient here and continue to leverage our learnings and collect as much information as possible. And so moving to a Part B where patients that are already teed up to enter into the trial to give us some information on studied longer dosing interval is going to advance our understanding of the whole program.

Thank you. Our next question comes from Richard Baral from Calend. You may begin.

Good morning, guys. Thanks for taking the question. I wanted to get your color on helping us inform the upcoming waterfall safety data. Specifically, I've had a lot of conversations with clients about what is acceptable sedation and what is acceptable somnolence. You know, just... Going back to mountain data where you saw 6% to 7%, I believe, rates of each, and given the higher dose, how should we think about what's acceptable? And is there a threshold, a written threshold in the public domain by FDA on what might complicate actual approval, either on sedation or somnolence? Thanks.

Yeah, Ritu, let me start out with some context, and I'll ask Steve. to talk about what we're looking for out of Waterfall more specifically and why we think Zoranilone has the potential to be a transformative medicine. So I'll remind you that we have studied Zoranilone in over 3,000 subjects and patients. And to date, the profile we've seen is extraordinarily consistent. We've seen rapid onset of action, three to four days, patients report they're feeling better. As we reported on the shoreline data, and I won't repeat everything Steve said, We've seen remarkable efficacy at two weeks, both 30 and 50, with most patients requiring only one or two two-week doses in an entire year. And the safety profile has been consistent also at dose and dose levels. What's important is not necessarily specific numbers of adverse events. It's whether patients stay on the drug or not. And because of the unique profile here, literally two weeks, maybe two to four weeks, of dosing we've seen remarkable compliance and what we're looking for here is is a drug that patients will take for two weeks uh so they get better faster and and stay better and what we said and just to be clear uh if we hit the primary endpoint given the different benefit risk of xeranolone over over 35 years worth of antidepressants we have a very important medicine in the landscape let me let me uh ask steve to turn provide a little bit more color

Yeah, so Ritu, thanks for the question. So first and foremost, we're really confident in the profile. Every bit of information that we get from the trials really points to a unique profile, both in terms of benefit as well as in terms of, you know, what the adverse event profile might look like. I remind you and your clients of a few things. Number one, somnolence is something that is often desirable for patients with depression. Many people have sleep disruptions. and we believe that's what's leading to the much smaller dropout rate, very low dropout rate from our clinical trials. We do exit interviews, and patients' perceptions are that that's not something that would potentially limit their use. Remember, patients are taking the medication for two weeks in any case, and often this can be beneficial. Many of these people are taking additional meds to help them sleep. The second is the numbers that we're reporting are actually comparable, if not better, than many drugs that are used right now to treat depression. And so I advise people to take a look at the labels for antidepressants that are in common use. And the reports that we have for either somnolence, sedation, and so forth are well within the parameters of drugs that are approved for the treatment of depression, even standard antidepressants. You know, right now the profile is one that we know is going to be beneficial for patients. We're looking forward to the waterfall data, but we're very confident in terms of the overall profile.

Thank you. Our next question will come from of from Bank of America. You may begin.

Hi, good morning. Thanks for taking my question. I guess as it relates to the waterfall study, in terms of durability, just based on the work that we've done, it seems like on day 15 you should have good data. As we look beyond that to maybe longer term, say 42, things of that nature, I guess first of all, would you have that information available at the top line? And how important is that based on your doctor feedback to have a longer durability of response? for these acute treatment regimens. Thank you.

Yeah, Suzanne, thanks for the question. I'll start out and turn it to Steve to provide a little bit more. So, you know, we're very excited and confident in our soon envelope opening for waterfall. We're looking forward to the data. And let me just be very clear. The primary endpoint in 15 days and having a statistical significance is really what we're looking for for this drug. There's nothing out there that gets patients better, faster, and keeps them better. Of course, we're looking at all the secondary endpoints and hopeful that they show promise. For day 42, what we're looking for is consistency of effect in the drug arm, not necessarily versus placebo. But again, a p-value in the primary endpoint is the most important aspect of waterfall. Steve, do you want to provide a little bit more?

Sure.

For many years, I was practicing psychiatrists and treating patients with depression. And the most important thing you look for is consistency of response and understanding exactly what's going to happen. So what we look for is an understanding of what to expect after somebody takes a medication. You know, the data we've seen to date has been very consistent. The majority of the patients really remain well. They don't have an immediate bounce back after two weeks of dosing as an initial concern. And in fact, even in the mountain study, patients remained well and very few had recurrences of symptoms over the course of six months. So, you know, while it's absolutely critical, our primary endpoint is day 15, what we want to understand is what proportion of patients stay well during the follow-up period, as well as, you know, what proportion of patients may require a retreatment. Those are data that we're getting from waterfall. And, you know, what we've seen is something we've talked about before, more than 70% of patients need no more than two treatments in a year. That's transformative for patients. It's absolutely essential to understand that. We're talking about four weeks of treatment over the course of a year, 48 weeks without additional need for therapy. That's what's so unique about 217, and that's what we're looking for in both the waterfall data as well as the entire landscape program. And so it's a profile that we think is going to be really, really important for patients, you know, if we're successful.

Okay. And we will see that level of data at the top line?

You can look to our prior releases to give you a sense of the kinds of information that we'll have in a release. But as Barry said, the things that we're focusing on are the primary endpoint as well as the key secondaries, very similar to what we've done for other acute studies.

Okay, thank you.

Our next question will come from Yasmine Rami from Piper Sandler. You may begin.

Hi, team. Congrats on the great progress in sharing data from Paradigm for us. One question for you. I just wanted to understand maybe the thoughts behind really increasing the shoreline to enroll an additional 500 patients in CORAL. Is this expansion into the open label based on communication you had with regulators? If you could just put a little bit of color around what prompted the interest to increase the numbers on the open label arm would be very helpful for us. And thank you for taking my question.

Thanks for the question, Yaz, and I actually very much appreciate the congratulatory note on the positive data. We're very excited by the emerging data for Sage 718, and we're thrilled we're moving that forward so rapidly into Huntington's disease, supported by the data presented today in Parkinson's disease. So, you know, back to your question about TrueLine. Look, we wanted an opportunity, first and foremost, as patients rolled off of clinical studies, CORAL, that Should those patients continue to need another two-week course of dosing? And you'll note in Steve's prepared comments that very few patients require additional doses, but the good news is those that did responded yet again. So we've got a very promising benefit-risk profile with Zoranilone and wanted the opportunity for other patients to benefit by Zoranilone, particularly those rolling off of coral and other patients out there. You know, Jim, you want to offer other thoughts? I think that covers most of it, Barry. But the other thing I would add is to say, you know, there are, with an integrated set of trials in the landscape program, to Barry's point, as patients are rolling off of coral, there's the opportunity for them to participate in shoreline. And we are seeing quite a lot of value in our ongoing naturalistic study for shoreline. And our view of it is that it's going to continue to provide useful information for for what we believe is going to be a transformative therapeutic approach. And so we're looking at all opportunities to gather more information on Duranolone, and Shoreline will very likely continue to deliver very important data to the overall program. Yeah, great comment, Jim. And just to put a fine point out here, there was no specific regulatory request or no regulatory request at all to increase that. And this was a sage decision, as Jim highlighted, to provide the opportunity to get more data and benefit patients.

Thank you, Barry.

Our next question will come from the line of Corey Seymour from JPMorgan. You may begin.

Hey, good morning. This is Turner on for Corey. Thanks for taking my question. Just one on 718. Can you provide any additional granularity on what sort of improvement you saw in cognition? Maybe just how it's stacked up relative to your expectations, but also kind of relative to what we've seen in Huntington's disease, since that seems like the lead indication going forward. Thanks.

Yeah. Thanks, Turner, for the question. And let me ask Steve to address that.

Sure.

You know, what we're looking for as we move

move into other areas is to both look at not just executive function, but learning and memory. So what we saw as we expanded the domains of cognition we looked at in these patients is not only improvements in executive function, but also learning and memory. And we think that's really important for two reasons. One, different patient populations have different challenges. So Huntington's is executive function primarily, and that was our hypothesis going in. In Parkinson's, there's both executive function challenges as well as dementia, so learning and memory. And we think that'll also, you know, lead into our broader understanding as we move into luminary and Alzheimer's where the primary challenges are learning and memory. So, as we learn more and more about the 718, the mechanism and its utility, that will really inform how we move forward in both the, you know, Huntington's as well as the other indications. Great. Thanks. Thanks, Turner.

Our next question will come from the line of Laura Chico from Wedbush. You may begin.

Thanks very much for taking the question. I just wanted to circle back on the shoreline question. You said FDA did not ask you for any additional data, but I guess I'm trying to understand, is there still a plan to submit a filing for the 30-milligram dose of Duranolone? And I guess, you know, just back of the envelope, it would seem like with the expansion of the Shoreline cohort and then enrolling the coral patients, there's probably over 1,000 subjects that would have been on the 50-meg dose at a longer term time. once the study is complete. So just trying to understand how the 30 milligram dose fits into everything in terms of the regulatory strategy. Thank you.

Yeah, Laura, thanks for the question. And let me provide some broad context and ask Jim to provide a little bit more. So your math is close. We will have a significant end when submitting the package to the FDA should Waterfall be successful and the ongoing discussions with the FDA successful. Just what I said earlier was there was no specific request by the agency to increase N. The shoreline expansion was to provide greater opportunity for patients and more data. We also, as you can imagine, we're getting tremendous requests from investigators, KOLs, and, of course, patients in desperate need. Before studies read out, we can turn an expanded access program. With most drugs, multiple doses are good to have. So we do plan on talking to the agency both about a 50 and a 30 milligram dose. But, Jim, can you provide a little bit more? Sure. And good morning, Laura. I think Barry said it well. The way we think about this is that the entire landscape program is designed to produce a package of information about Zoranolone. So, absolutely, all of the data on Zoranolone, including our extensive data set on the 30 milligram dose, will be included in the filing. And, you know, that's That isn't really anything out of the ordinary. The discussion will be around the drug itself, and all of the data will be included in any potential filing.

Thank you.

Our next question will come from Akash Tiwari from Wolf Research. You may begin.

Hi, this is Leo for Akash. Recently, practice mentioned they couldn't claim MDD treatment if they only treat patients for 15 days. So they also look at day 28 data for their MDT trial candidates. Then in your case, we have the Waterfall secondary endpoint at day 48, sorry, 42. And how important is that day 42 data for the Rinalon filing? And how did FDA view the open label shoreline study as supporting evidence for the durability of the Rinalon? In addition, we also noticed the Waterfall trial has completed the enrollment of of 543 subjects with only two arms and about like 15 to 20% dropout rate, is this fair to think Woodford trial has about 90% power to detect 2.4 to 2.5 HMD differences to placebo? And lastly, what subscales of HMD 17 tend to increase if we look at patients with HMD cutoff of 20 versus 24 versus 28? Thank you.

Yeah, thanks. I think there were a number of questions in there, so let me provide a little bit of context and ask Steve to comment. Maybe Jim might want to comment. So, look, again, we're very excited by the waterfall readout. As we talked about previously, we had the opportunity to increase the N twice. You know, unfortunately, we are in a brain health pandemic, and as I commented on the call, the rates of depression are three- to four-fold in the United States alone. So, Unfortunately, there's a lot of people suffering from MDD out there at rates greater than we had prior to the pandemic lockdown. So that increased N provides significant powering on the primary endpoint. What we're looking for is statistical significance at day 15. This is such a unique profile. The benefit-risk here differentiates from, again, 35 years of drugs being developed in the area, and we're very excited by that. Steve, you want to provide a little bit more?

Sure. The study itself is designed to show differences at day 15. That's the reason why we have breakthrough therapy designation. The ability to get patients better within two weeks is what got us, it's what got the FDA interested in this program. It's what's unique about the profile. And we've seen statistical significance and clinically meaningful differences as early as day three, day eight, day 15. And those benefits are maintained. The only real way to assess what that looks like in terms of pattern for patients that have gotten better is to use shoreline data. And, again, this is an overall program that was agreed with the FDA when we had breakthrough, where we actually naturalistically see what happens to patients when they're treated up front and then followed over the course of a year for need for retreatment. And what we've seen is that patients require, 70% of the patients plus require no more than two treatments in a year. About half of them only require one treatment. So this gives a lot of information about how a drug that works very rapidly would be used in real life. And it's a very unique overall profile. So, you know, for our primary, absolutely essential to day 15, we're looking to see essentially patients being, you know, that have been proved remain well, the real data for that aspect really comes from Shoreline, and we have a very substantial and now growing database around that, and it continues to support the idea of episodic treatment.

Thank you. And as a quick reminder, please limit yourself to one question. Our next question will come from Jay Olson from Oppenheimer. You may begin.

Oh, hey, guys, thanks for taking the question. I'm curious about SAGE-324. I think you're leading that development program with Biogen. Can you just talk about the indications you're planning to pursue and whether or not you plan to study 324 in Parkinson's disease or epilepsy patients? Thank you.

Yeah, Jay, thanks for the question. So, look, we're really excited about SAGE-324 neurology franchises. We believe it's a novel potential treatment for chronic neurological conditions. And we thought very differently about movement disorders. So, you know, if this is successful in the initial indication of central tremor, it will be the first new treatment in over 50 years. So we're really excited by that. As I mentioned, we're very confident that in the Phase IIb we'll reach a dose and frequency that is a profile to take into Phase III and then a commercializable profile. With that profile and talking to our collaborators at Biogen, we'll map out additional indications, but we do believe that there are a number of additional indications we could pursue with Sage 324 once we're over that next step of dose and frequency in essential tremor. Steve, anything else to offer?

Yeah, I think what I'd say is, you know, as we dial in what profile we're looking for, we're working closely with investigators, we're working with patients and patient advocacy groups. We're even doing exit interviews with the patients that participated in our trials to understand exactly what they're looking for in a medicine. This is something that we've been looking to essential tremor for quite some time. And, you know, right now the data on hand really speaks to upper limb tremor being one that's a driver of disability. We can see that when we look at the correlation with improvements in activity of daily living. So overall, our growing understanding of 324 is something that, you know, not only is it unique, but it's something that we think is really a great example of the approach that we take to R&D. So, you know, we've had preliminary data in some of these other indications, Parkinson's, non-clinical data, and epilepsy. Right now our focus is on essential tremor, but we certainly have broader interests in other areas moving forward. Jim?

Yeah, maybe to build on that a little bit, you know, the question was about other potential indications. And 324 we see as the lead molecule for a neurology franchise. And as Steve was just saying, it's a little bit to do with the way we think about R&D in general. And we talk a lot about two things, following the science and leading with human data. And so following the science in this case means we understand that there are multiple patient populations who could potentially benefit from a GABA-potentiating molecule like SAGE-324, and especially with that profile that's optimized for chronic delivery. And so that leads us to that second point of leading with human data. And although our key focus at the moment on the program is in essential tremor, as you've been hearing, we do have data from an earlier program preliminary look at potential efficacy in Parkinson's disease, and we've got an absolute raft of preclinical data indicating that this mechanism and this molecule would be valuable treatment for epilepsy. So there's a lot of potential value for the neurology franchise, and that's something that our partners at Biogen are well aware of, and that'll be the the subject of ongoing conversations. But the key focus for now is essential tremor, but we think that there is a lot of potential for the molecule in other groups in neurology as well.

Great. Thanks for taking the question.

And our next question will come from Paul Matisse from Stiefel. You may begin.

Great. Thank you. Have you guys... talk with Biogen about scenario planning. If waterfall and coral were to fail, but the phase three postpartum study were to succeed, would you launch this drug in PPD and then kind of figure everything else out later, or would you wait? And then separately, what's the status of future trials and anxiety and bipolar depression, and is the initiation of those studies at all contingent upon what we see in MDD? Thank you.

Hey, thanks, Paul. Thanks for the question. So, again, I'll remind you that the data we've seen with Zoranolone now in over 3,000 subjects and patients has been highly consistent, rapid onset of effect three or four days. It's been very durable, as I and Steve and Jim have highlighted, with an adverse event profile, it's been consistent. So, you know, we are highly encouraged by the upcoming data readouts. We sat down with the agency and mapped out three unique approaches, three unique different ways to potentially get approval, two in MDD, as you highlighted, and one in PPD. And we believe that one of those phase threes needs to be positive for us to have a drug on the market. So we're very enthusiastic about all three approaches and believe that, you know, as you see with many drugs, we need one positive phase three here. And that's an agreement with the agency. Yes, some scenario plan with Biogen at a very high level, but not in any any detail, and we believe we have a very important drug here, not only for MDD and PPD, but potentially other indications. And we'll share more about those paths forward as we map that out with Biogen.

Our next question will come from the line of Andrew Sire from Jefferies. You may begin.

Thanks, and good morning. My question is around waterfall. And I know you guys are very good at controlling this, and I don't think this has ever been an issue for you, but I'm just curious to see what steps you've taken to ensure there won't be a higher-than-expected placebo response out to day 42. Basically, I'm just curious to see how confident you are this scenario wouldn't happen. Thanks.

Yeah, Andrew, thanks for highlighting that. And let me make a comment, and I'll turn it over to Jim to talk about the conduct of the study. With the shoreline data, with the increasing N in waterfall, we're increasing our safety database. It's a very large indication, as we're all aware. So the bigger the safety database, the better. Importantly, Andrew, we've not changed guidance. We've committed to delivering the top-line results for Phase 3 in the first half of this year, and we intend to continue to do that. So we're enthusiastic about the progress of the program. It's fully enrolled. And we're looking forward to the readout. Jim, you want to talk about specifics of the control placebo and our thoughts there? Yeah, absolutely. And, Andrew, thanks for the question. As I think you know, we put a lot of thought and focus into design. And I think the answer is that we've talked a lot about the waterfall design and modifications that we made in design based on learnings. The other important thing to remember is many of the things that we have learned through multiple trials in the landscape program very much remain in the design of waterfall. And I think, you know, that's our view on things like controlling for placebo effects. I think what we try to do is be very rigorous about our execution, and that is something that we are doing again with the waterfall study.

Thanks very much.

Thanks, Andrew.

Our next question comes from the line of Nina from Citi. You may begin.

Hey, guys. Thanks for taking my question. So I'm just kind of curious about the next steps kind of after waterfall. I know you've talked about, you know, not necessarily meeting the Redwood study at this point, given the data you're seeing from shoreline and, you know, a number of other studies. But I guess, are there kind of differences in next steps depending on the magnitude of effect that you see in waterfall? Assuming it is statistically significant, just depending on the differential between drug versus placebo, do you envision there being any differences in next steps, or as long as it's that big, there's really just one path forward?

Yeah, Nina, thanks for the question. I'll take it, and if Steve has other callers, I'll ask him. As we've said, what we're counting on for waterfall is a statistically significant result result at day 15. Um, if that's true and we have an adverse event profile that's consistent with what we've seen already in over 3000 subjects and patients, we have a very important medicine with a very differentiated benefit risk than anything that exists on the market today. So just to be specific at day 15, we have a drug and I think the unmet need is so extreme. that KOL's patient groups and the regulators appreciate that that's what we're looking for. So, you know, obviously, you know, data matter and effect size matters to some extent, but we're looking for statistical significance. Our plan, should Waterfall be positive, is to sit down with the agency and be very clear in mapping out next steps. We could start rolling submission. We could file Waterfall. You know, a key that we're looking for, just to be clear, is also timing of corals. We would not want to get into a situation where we filed an NDA, had another major data readout, submitted that readout, and went into kind of a three-month extension. So should the agency want to see coral, we'd likely wait the whole clinical section for both waterfall and coral. Now, you asked about Redwood. I'll remind you that before data existed as it exists today, a question was asked, how many times in a year can you effectively and safely treat a patient. That's not really a question with all the data we have right now. Waterfall, shoreline, that needs to be asked. We're very confident, assuming a positive waterfall, that Redwood will not be a regulatory requirement for filing an NDA. We might have other post-approval commitments that we'll map out as soon as we talk to the agency. Steve, anything to add? Yeah.

The only thing I'd say is, you know, when we started this program, we set out to identify a drug with a very unique profile. a medicine that aligns closely with patient interest, it's quick, the effects are durable, and there are long treatment-free intervals. The data that we get from Shoreline really supports that approach. What we're looking for is that next study where we're showing the acute effects. That's the day 15 endpoint. So that is absolutely essential, and it's important. The other thing I'd add is that sometimes people wonder about effect versus effect size. What we've seen across the board, it's been very consistent, are large, rapid, and sustained improvements in the drug group. Placebo varies quite a bit, and so that's why we're very confident around statistical significance being the primary endpoint here and the goal prior to filing.

Our next question comes from the line of Gary Mackman from BMO Capital Markets. You may begin.

Hi, this is Evan Hua filling in for Gary. Thanks for taking my question. So regarding Phase 324, what are the next steps in terms of developing the protocol for Phase 2B? Are there, like, any additional cuts of data you'll be looking at in the next several months that could help inform how you'll move forward in terms of dose, timing of dose, and patient population? And if so, When would you release some of that data? Thanks.

Yeah, thanks for the question. So let me hit it at a high level and ask Jim to talk about it. So the team of SAGE and Biogen is actually pouring through the detailed kinetic data, looking at dose, duration, PK, PD, and the value of those data will help us design the Phase IIb dose and frequency, and we'll likely test a couple different ones to make sure that we have the right profile going into of phase three. So we're very encouraged by the kinetic readout, you know, particularly the patients that were the worse off patients over 12, where we saw 41% reduction in essential tremor, very important reduction for these patients. Jim, you want to talk about some specifics and next steps? Yeah, absolutely, Barry. And when we think about the results from kinetic, as you heard earlier, statistically significant effects on the primary endpoint and sustained over a 28-day period with an adverse event profile that's consistent with what we understand about the drug and about the mechanism of action. So the question to be answered from Kinetic was, can we see efficacy without tachyphylaxis, which we're excited about because that's the result that we see. So the focus on the 2B and the rest of the Phase 2 program is on dosing strategy. And remember, 324 is a long half-life drug that's been optimized for chronic dosing. That gives us a lot of flexibility in exactly the dosing strategy that we'll use for pivotal studies. And so that's going to be the focus. And as I think Barry mentioned, there are a number of different things that we can look at modifying. So Certainly dose level, dose frequency, there are a number of aspects that we're looking at. And so the SAGE and Biogen teams will figure out what's the most efficient way to answer those questions in Phase 2b.

Thank you. That is all the time we have for questions today. I'll turn the call back over to Barry Green for any closing remarks.

Thanks, Operator. Thanks, everyone, for joining us this morning. We are very pleased with the significant progress in the first quarter, and we're excited by the potential for additional milestones throughout the balance of this year. And I want to acknowledge that May is Mental Health Awareness Month, and I'm excited to see the real movement across the world, a movement that encourages people to speak up and change the narrative on brain health and mental wellness. There's also growing awareness of the global impact the current mental health pandemic is having on the young and the old. In fact, just this week, MTV convened a groundbreaking coalition of media companies and mental health experts to harness the power of media and storytelling, kicking off at Better Together, a mental health storytelling summit, drawing talent including Oprah Winfrey, Trevor Noah, Regina King, among many others. The coalition unveiled a first-of-a-kind comprehensive mental health media guide, which provides best practices and evidence-based recommendations to empower content creators and entertainment to expand portrayals of mental health to further encourage viewers to speak up and get help. True progress, as we further lean in, is a very real challenge presented by a lack of progress in talking about and treating brain health issues. We're excited to see this progress and for others joining us in what we have acknowledged is a big lift. Now more than ever, patients suffering with brain health issues need better, more effective treatment, and the SAGE team is working tirelessly to deliver on our vision of bringing such treatments to patients so they can get better sooner. Thanks, everyone. Looking forward to further discussions. Be well.

This concludes today's conference call. Thank you for participating. You may now disconnect.