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.