Sage Therapeutics, Inc.

Good morning. Welcome to Sage Therapeutics fourth quarter and full year 2021 financial results conference call. Currently, all participants are in listen-only mode. This call is being webcast live on the investor and media section of Sage's website at sagerx.com. This call is the property of Sage Therapeutics and recordings, reproduction, or transmissions of this call without the written... Consent of Sage Therapeutic is strictly prohibited. Please note that this call is being recorded. I would now like to introduce Helen Rubenstein, Director of Investor Relations at Sage.

Good morning, and thank you for joining Sage Therapeutic's fourth quarter and full year 2021 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 related to today's call, as well as the slides that contain supplemental details. I'd 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 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 will begin the call with prepared remarks by Barry Green, our Chief Executive Officer, who will provide an overview of the progress from the previous quarter and full year 2021. We will also be joined by Jim Doherty, our Chief Development Officer, who will review recent development progress across our programs, and Kimi Yaguchi, our Chief Financial Officer, who will review the financial results from the quarter. Chris Bonecki, our Chief Commercial Officer, will join for Q&A. With that, I'll now turn the call over to Barry.

Thanks, Helen, and thank you, everyone, for joining us this morning. Before I begin, I want to take a moment to acknowledge the major events happening on the world stage this morning. We're watching along with the rest of the world, and our thoughts and prayers are with all those affected. Rest assured, we'll be focused on doing what we can, developing innovative medicines for brain health. And now let me turn back to our quarterly call. 2021 was an important year for Sage, and going into 2022, we're well-positioned to advance our mission to pioneer solutions to deliver life-changing brain health medicines so every person can thrive. By leveraging our significant expertise in brain circuitry with demonstrated leadership in GABA-A and NMDA receptor pathways, we've developed a robust pipeline of programs, including six new chemical entity development candidates across 11 or more possible indications. We believe that with this novel pipeline, we have the potential to help the millions of people suffering from the unmet need in brain health disorders, and we look forward to helping as many as we can in the years to come. I'd like to begin by providing some context on MDD and PPD. Families living with depression have not been well served. Largely stigmatized, depression is the dark shadow of human illness. Current treatments are just not working well enough, with little innovation in the last 60 years. The profile of treatments remain unchanged despite 35 approved treatments in the last 30 years. Prevalence and impact continue to worsen. with a three- to four-fold increase in people experiencing symptoms of depression since the start of the COVID-19 pandemic, and an estimated one in eight women with a recent live birth experiencing postpartum depression. The economic implications are as dire as the health implications. In 2020, economists estimated that depression and mood disorders cost the U.S. alone over $784 billion. Change is needed. We need medicines that work faster, last longer, are well-tolerated, and look beyond depression as a lifelong chronic illness. The current treatment approach results in a trier and error pattern. Delays in resolving MDD symptoms as seen with current antidepressants are often associated with more severe depression, increased relapse rates, and worse long-term clinical outcomes. We believe patients deserve better. As a society, we can do better. Innovative thinking leads to valuable advancements that benefit society. The riskiest thing we can do for people is to maintain the status quo and believe that what we have is good enough. The data are clear. For the nearly 7 million people diagnosed with MDD and prescribed an antidepressant each year, the average course of therapy is only seven weeks. And 80% of patients change treatments once or twice within the first year. And among those that have changed treatments, 50% change within the first month. patients clearly need more from their therapy. That's why we believe there's a significant opportunity for new therapy in the treatment of MDD, like Zoranolone, if approved. One MDD population subset that stands apart in its need for new treatment options are those with MDD with elevated anxiety as a symptom of their depression. According to literature, which often refers to this population as anxious depression, up to two-thirds of people with MDD experience elevated anxiety symptoms as part of their depressions. Based on its mechanism of action and data seen in studies to date, we believe Zoranolone may be well-suited to help these people. We look forward to sharing more about MDD with elevated anxiety in the future, but be sure this is going to be a key focus going forward. If we're successful in our efforts, we've commercialized our partnership and engagement with all stakeholders, patients, healthcare professionals, payers, patient advocacy groups, and policymakers. These engagements are needed to enact the change necessary for MDD and PPD patients to get the care they deserve and for appropriate patients with MDD and PPD to receive Zoranilone, if approved. We remain on track to start the rolling NDA submission in MDD early this year and plan to complete the submission in the second half of 2022. As we shared previously, the planned NDA will include efficacy data from five studies. MDD-201B, Waterfall, Robin, Coral, and the Japanese study. In addition to data from the Shoreline study on repeat treatment efficacy sustained beyond the treatment period, and lastly, safety data from the entirety of the program. We also plan to submit an associated NDA with Zoranolone and PPD in the first half of 2023, pending completion and results of the Skylark study. We announced this morning that the FDA granted fast-track designation for Zoranolone and PPD. Fast-track designation is granted to drug candidates that treat serious or life-threatening conditions and demonstrate the potential to address unmet medical needs. Now turning to the recent advances in our neuropsych franchise led by SAGE 718, a wholly owned first-in-class NMDA receptor PAM being developed as a potential oral therapy for cognitive disorders associated with NMDA receptor dysfunction. In our last quarterly call, we announced that SAGE-718 was awarded fast-track designation by the FDA for development as a potential treatment for Huntington's disease, specifically Huntington's cognitive impairment. This designation was partially attributed to the promising early data we generated in our Phase I study of SAGE-718, which demonstrated improvements in cognitive performance in patients with Huntington's cognitive impairment. Patients are now enrolling in our Phase II placebo-controlled dimension study, evaluating SAGE-718 and in HD cognitive impairment, and we plan to expand our work in the syndication by initiating the Phase II placebo-controlled surveyor study in mid-2022 and begin an open-label extensive study in HD cognition in late 2022. We're also advancing SAGE-718 in patients with mild cognitive impairment due to Parkinson's disease. Phase II study evaluating SAGE-718 and patients with mild cognitive impairment, or MCI, due to Parkinson's in mid-2022. Finally, SAGE-718 is also being evaluated as a potential treatment for patients. We recently announced that SAGE-718 demonstrated improved performance from baseline on multiple cognitive function tests in patients with mild cognitive impairment and mild dementia due to Alzheimer's. The signals observed in the open-label luminary study were consistent with those seen in our Parkinson's and Huntington's trials. We plan to initiate a placebo-controlled Phase II study in SAGE-718 in patients with MCI and mild dementia due to Alzheimer's, which is expected to begin enrolling later this year. We've also made great progress on our neurology franchise, which features SAGE-324, another internally developed compound that is part of our collaboration with Biogen. Currently, SAGE 3-4 is being evaluated as a potential treatment for patients suffering from essential tremor, ET, and other neurological disorders. Jim will provide more insight in this program and updates for the year. I'd like to take a moment to thank the SAGE team for their hard work, commitment, and dedication on behalf of patients. 2021 was a data-rich year, and we realized important program advancements in multiple disease areas across all three of our brain health franchises. This work last year built a solid foundation for continued progress in 2022, and I'm excited by what the future holds for Sage. Additionally, I believe our balance sheet provides us the strategic and operational flexibility to continue to grow our pipeline as we continue to evaluate each investment diligently to ensure our decision-making positions us well in our efforts to create long-term value. In closing, I'm confident we have the opportunity to build on the momentum from the fourth quarter and throughout 2021 to to generate continued success in 2022 as we advance our journey to become the leader in brain health and a top tier biopharmaceutical company. Now I'd like to turn the call over to Jim for more detailed discussion of our recent coral data and a preview of our expectations for 2022. Jim?

Thanks Barry and good morning everyone. Throughout 2021 and in recent weeks, we've made important progress across our three brain health franchises and I'm pleased to highlight our next steps for each program. Starting with our depression franchise, we recently announced top-line results from our CORAL study evaluating the efficacy and safety of Zoranilone when co-initiated with standard antidepressant treatment, or ADT, compared to standard of care ADT co-initiated with placebo in patients with major depressive disorder, or MDD. The CORAL study was designed to address whether the rapid onset of efficacy seen with Zoranilone in our clinical trials would benefit people with MDD when co-initiated with an ADT. Seranolone co-initiated with an ADT met the primary endpoint in CORAL, demonstrating a statistically significant reduction in HAMD17 scores at day three, the first measured time point, compared to standard of care ADT co-initiated with placebo. Seranolone co-initiated with an ADT also met the key secondary endpoint, a statistically significant improvement in depressive symptoms over the full two-week treatment period at all scheduled visits. Taken together, these endpoints demonstrated a significant benefit of Zoranilone in the rapid reduction of depressive symptoms in the CORAL study. Additionally, Zoranilone co-initiated with an ADT was well-tolerated with no new safety signals attributable to Zoranilone identified. Importantly, analysis of results from the waterfall and shoreline studies identified MDD with elevated anxiety at baseline as a subgroup that is particularly responsive to Zoranolin. When treated with standard-of-care ADTs, this subgroup of patients, which represents up to 66% of all MDD patients, is less responsive to treatment. In the CORAL study, this pre-specified MDD subgroup was more responsive when co-initiated with a standard-of-care ADT than standard-of-care ADT co-initiated with placebo, as measured by the primary and key secondary endpoints. This finding is important. It's always important in drug development to know where your drug works best, and, of course, critical in guiding potential commercial use. Finally, a few thoughts regarding Zaranlon's mechanism of action. At the start of the landscape and NEST programs, we hypothesized that Zaranlon could lead to rapid and sustained improvement of depressive symptoms through restoration of key neuronal networks dysregulated by depression. Clinical trials with Zoranolin to date have generated efficacy and safety data supporting this hypothesis, with Zoranolin demonstrating the ability to address depressive episodes in a broad spectrum of patients with MDD with a varying profile of depressive symptoms. Zoranolin enhances the function of GABA-A receptors, key elements in the brain's primary inhibitory system. GABAergic neurotransmission is vital for normal brain function, and significant evidence shows that GABAergic function may be disrupted in depression. Importantly, Zoranolin has three major effects on the GABAergic system, enhancing synaptic GABA-A receptor function, enhancing extrasynaptic GABA-A receptor function, and enhancing GABA-A receptor expression. These effects of Zoranolin, we believe, all contribute to its clinical profile in treating depression. We are often asked whether members of another class of GABA-A receptor enhancers, the benzodiazepines, have the same effects as Zoranolin. The short answer is they don't. Although benzodiazepines share one of the effects of Zoranolone, namely enhancement of synaptic GABA-A receptors, they cannot match the full profile of Zoranolone as they neither enhance extrasynaptic GABA-A receptors nor enhance GABA-A receptor expression. Benzodiazepines are not antidepressant drugs. While they are useful medicines that treat a variety of conditions, including anxiety and insomnia, they are not approved to treat depressive disorders either alone or in combination with antidepressants. They are reported to have minimal effects on depressive symptoms as monotherapy, and in some cases have been reported to worsen depressive symptoms. Anxiety and depressive symptoms can also return after cessation of treatment with benzodiazepines. Finally, benzodiazepines carry significant safety considerations both alone and in combination with ADTs, including the risk of dependence and withdrawal symptoms, cognitive impacts, and drug likability. With Zoranilin, we've seen improvement of both core depression symptoms as well as anxiety symptoms in patients with MDD and PPD in the landscape and nest programs with a differentiated tolerability profile. In the choral studies, Zoranilin was co-initiated with one of five major antidepressant drugs in current use, including both SSRIs and SNRIs. The demonstration in the choral study of significant benefit for Zoranilin co-administration with these standard-of-care ADTs over treatment with standard-of-care ADTs alone at day three and over the treatment period was not a small feat. We also look forward to results from those coral subjects who have enrolled in the Shoreline Retreatment Study. These data will contribute significantly to a full understanding of the durability of response to Zoranolone in treating MZD. Additionally, in the fourth quarter of 2021, we reported positive data from the Zoranlone 50 milligram cohort in the ongoing Shoreline study in patients with MDD. The Shoreline study is a naturalistic safety and tolerability study to investigate, as needed, repeat treatment with Zoranlone over a one-year period in patients with MDD. In the Zoranlone 50 milligram cohort, the majority of patients who responded to an initial Zoranlone treatment course received only one treatment in total, and 80% received only one or two treatment courses during their time in this year-long study. This means the potential for only two or four weeks of treatment each year. Safety profile in this cohort was consistent with other studies. There was also no dependence, drug-like ability, or additional side effects. These data will be very useful in our NDA filing As you may be aware, the FDA has communicated that real-world evidence increasingly plays a role as a component in regulatory decision-making. We are confident that the Shoreline Study, the largest prospective naturalistic study done in MDD, aligns with the FDA's efforts to emphasize real-world evidence that will transform patient healthcare and drug development. Enrollment in the Shoreline Study is ongoing and has surpassed 1,000 patients. We now have six positive trials with Duranlone in MDD and PPD in the landscape and nest programs. And the profile we have seen in clinical trials to date includes rapid and sustained reductions in depressive symptoms, a well-tolerated safety profile, improvements in quality of life and overall health across domains of feeling, functioning, and well-being that were reported by patients and continued after completion of treatment. a short course of treatment that can be taken as needed with a novel mechanism of action, and a flexible treatment approach that may provide optionality to HCPs and patients. To reiterate our filing strategy, we plan to begin the rolling submission for MDD in early 2022 with the non-clinical modules submitted first. The clinical module will likely be the last module submitted for this filing expected to occur in the second half of 2022. Additionally, the ongoing Phase III Skylark study of Zoranilone in PPD is on track to read out in mid-2022. We're looking forward to sharing more through several upcoming presentations at scientific forums this year, as outlined on slide 29 of our corporate presentation. Turning to our neuropsychiatry franchise, we continue to advance the development of SAGE718, our lead NMDA receptor positive allosteric modulator, that is a potential oral therapy for disorders where impairment of cognition is one of the main drivers of disability. SAGE 718 was recently granted a Fast-Track designation as a potential treatment for cognitive impairment in Huntington's disease, or HD, which is an important benefit in our development efforts to bring this therapy to patients. With the data from the SAGE 718 in HD patients in phase one in hand, we have now begun dosing patients in the DIMENSION study, a placebo-controlled Phase II study of SAGE-718 in HD cognitive impairment. Additionally, we look forward to initiating enrollment in the SURVEYOR study, our second Phase II study in HD cognitive impairment, expected to commence in mid-2022 with an open-label extension study planned to initiate in late 2022. We are also advancing SAGE-718 in patients with mild cognitive impairment due to Parkinson's disease, or PDE, The PARADIGM study evaluated patients with mild cognitive impairment due to PD. Based on the positive impact that Sage 718 had on multiple domains of cognition in that study, we plan to initiate a Phase II placebo-controlled study of Sage 718 in patients with mild cognitive impairment due to PD in mid-2022. Finally, we are advancing Sage 718 in patients with mild cognitive impairment and mild dementia due to Alzheimer's disease, or AD, In the fourth quarter of 2021, we announced positive results from the luminary study demonstrating that patients with mild cognitive impairment and mild dementia due to AD who were on stage 718 experienced improved performance from baseline on multiple tests of cognitive function. We expect to initiate a placebo-controlled phase 2 study with stage 718 in patients with mild cognitive impairment and mild dementia due to AD in late 2022. Our confidence in the data seen to date with SAGE718 has led us to develop a very robust program across diseases of unmet need. Now, I'd like to highlight the advancements made in our neurology franchise, led by SAGE324, a next-generation positive allosteric modulator of GABA-A receptors, which we believe holds significant potential in the treatment of neurological conditions like essential tremor, or ET. Based in part on the positive data from the kinetic study reported earlier in 2021, We recently initiated a Phase IIb Kinetic II dose-ranging study evaluating Sage 324 in ET in late 2021. Kinetic II is designed to optimize the dose and frequency of Sage 324 in ET. I'm pleased to share that the first patient has been dosed in the Kinetic II study. In closing, our R&D strategy is both proactive and predictive. Everything we learn from a program can be applied to other programs, leveraging knowledge to define the path forward while driving for seamless execution with the goal of addressing unmet needs for patients who need new approaches. We believe our strategy may lead to improved chances of success across depression, neurology, and neuropsychiatric franchises. I am convinced our strategy is working and look forward to providing updates across our three franchises this year. Now I'll turn the call over to Kimmy for a review of our financials. Kimmy?

Thanks, Jim. 2021 was a pivotal year for Sage as we made important progress across all three of our brain health franchises and achieved key milestones towards our long-term corporate goals. I'm proud of the work we've achieved at Sage, illustrated by the numerous data readouts, presentations at medical conferences and scientific forums, and the preparations well underway for the planned filing of our NDA for Xeranalog. I'd like to reiterate what Barry noted in his opening remarks. We're well positioned to advance our mission to pioneer solutions to deliver life-changing brain health medicine so every person can thrive. We're poised to achieve what we believe will be a significant progress in 2022 based on tremendous opportunity we have to invest in our robust portfolio. We have a unique opportunity to accelerate our clinical and corporate progress supported by a strong balance sheet. 2022 will be a year of focused execution, a year where, if successful, we aspire to create significant value for our society, especially patients, healthcare providers, and our shareholders. I'd like to start by highlighting our fourth quarter and end-of-year 2021 financials, and then provide some remarks on our financial guidance. We recorded $1.6 million in net revenue in the fourth quarter from the sales of Xeresso. That compares to 1.7 million of net revenue from the sales of Xeresso for the same period in 2020. For the full year, net revenues for the sale of Xeresso in 2021 was 6.3 million, compared to 6.7 million in 2020. We remain committed to moms, their families, and all those impacted by PPD. Research and development expenses were 75.4 million in the fourth quarter. including 9.1 million of non-cash stock-based compensation expense. That was compared to 81.7 million, including 10.1 million of non-cash stock-based compensation expense for the same period of 2020. R&D expenses for the full year were 283.2 million, including 49.7 million of non-cash stock-based compensation expense in 2021, compared to $292.7 million, including $42.4 million of non-cash stock-based compensation expense in 2020. This reflects the impact of our collaboration with Biogen as we recognized a reduction in expenses of $79.8 million due to reimbursement under the collaboration. However, this reduction in R&D expenses was partially offset by an increase in spending on our wholly owned pipeline. We expect to continue to invest in advancing our wholly owned pipeline in 2022 in a smart and disciplined way. Selling general and administrative expenses were $51.6 million, including $11.5 million of non-cash stock-based compensation expense in the fourth quarter. That's compared to $53.5 million including 10.6 million of non-cash stock-based compensation expense for the same period of 2020. SG&A expenses for the full year were 183.5 million, including 54.9 million of non-cash stock-based compensation expense in 2021, compared to 197 million, including 51.8 million of non-cash stock-based compensation expense in 2020. The decrease in SG&A were primarily driven by the reimbursement for our collaboration with Biogen. As we prepare for the potential launch of Zoranolone, we expect SG&A expense will increase in 2022. Recall, the collaboration includes 50-50 cost sharing in the United States for Zoranolone and SAGE-324. We reported a net loss of $124.7 million for the fourth quarter, compared to net income of $974.9 million for the comparable period of 2020. For the year ended December 31st, 2021, net loss was $457.9 million compared to net income of $606.1 million for the same period in 2020. In both periods, the decrease was due to the collaboration revenue from Biogen in the fourth quarter of 2020. As a reminder, in the fourth quarter of 2020, Sage recorded a $1.1 billion of collaboration revenue from Biogen that consisted of an upfront payment of $875 million plus $232.5 million in excess proceeds from the equity investment under the stock purchase agreement. Finally, we continue to maintain a solid financial foundation, ending the year with $1.7 billion in cash, cash equivalents, and marketable securities. Turning to financial guidance for 2022, we expect to end the year with approximately 1.3 billion of cash and cash equivalent. We do not anticipate any milestones from collaborations in 2022. Finally, we believe our cash and cash equivalents, ongoing collaboration funding, and potential revenue will support our operations into 2025. At Sage, we pride ourselves in being courageous, innovative and efficient across everything we do, always with a line of sight on how this work can benefit patients. I look forward to providing updates on our progress. I'll now turn it over to Helen to handle Q&A with the operator.

Helen? 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, please feel free to return to the queue. Now I'll turn it over to the operator to handle Q&A. Operator?

Thank you. To ask a question, you'll need to press star 1 on your telephone. To withdraw your question, you'd press the pound key. Our first question comes from Salveen Richter with Goldman Sachs. Your line is open.

Thanks for taking the question. This is Andrea on for Salveen. I'm just curious on the feedback you've received from physicians post the CORAL results. Has their view on how they would use the drug or maybe even who they would treat changed in any way? Thanks so much.

Yeah, Adrian, thanks for the question. I'll start and I'll ask Jim to comment because we have received quite an amount of feedback. I can tell you that the feedback we've seen from potential prescribers post-CORAL is quite encouraging. The rapidity of effect and the well-tolerated profile, in fact, in some instances in the GI effect improved profile, when Zoranolone is combined with an antidepressant, really opened eyes and showed It was very encouraging in the minds of KOL. I will also tell you that the prospective analysis that we did with MDD with elevated anxiety was particularly interesting. As we talked on the call, MDD with elevated anxiety, or also called anxious depression, are patients that are not well served by current standard of care. That's well documented in literature, including STAR-D. So they were very interested in having a new drug to treat a patient population that they have said historically is very, very hard to treat. Let me ask Jim to talk about additional feedback, and then maybe Chris can talk about some of the patient types that we're hearing from potential prescribers. Jim?

Sure, Barry. And as Barry mentioned, a lot of encouraging feedback really across a couple of different domains. Certainly when you think about the CORAL study, we're talking about co-initiation with a standard of care antidepressant, and we had chosen in our design to include Sertraline, F-Citalopram, Citalopram, Duloxetine, and Desbenlafaxine. So really a broad sampling of the standard of care antidepressants in an open-label format. And physicians were impressed both with the ability of Zaranloan to demonstrate an improved performance over that broad range of antidepressants. Also quite a bit of interest in the tolerability profile of Zaranloan relative to other standard of care antidepressants. And finally, just to reiterate to Barry's point, we're very, very encouraged by the results that we've seen in the cohort of subjects who show elevated anxiety at baseline who seem to be very sensitive to treatment with Zoranilone, which is in contrast to, as we keep hearing from KOLs, the challenge in treating those patients with standard of care antidepressants. So overall, we've been very pleased with the feedback we've been hearing so far from KOLs. Chris, do you want to talk a little bit about?

Yeah, I think with respect to patient types, first let me take a step back. When you consider what's happening in this marketplace, 70% of patients are either initiating or switching therapies over the course of a year. And as Barry pointed out, many of those patients are switching multiple times in a given year. So what clinicians are really looking for is a therapy that works rapidly, that sustains effect over time, doesn't carry the stigmatizing side effects of some of the other therapies like sexual dysfunction and weight gain, and quite frankly can be taken in a short course over a shortened time period that allows them to sustain effect over, as we know from our studies, up to a year. So with that said, when you have conversations with clinicians, whether they're KOLs or those that are out in practice every day treating patients that are suffering with MDD and PPD, they're looking for those attributes of a therapy, a therapy that works rapidly and sustains effect. And with CORAL, what we've effectively done is we've We said, you know, with this therapy, there's an opportunity to demonstrate rapid efficacy as early as day three. And with studies like Shoreline to pair that up, that there's the sustained effect over time. So when you think about the practical patient that these physicians may see, it may be a young adult like a college student or someone starting their first job who really needs that rapid and lasting effective therapy without those stigmatizing side effects. And quite frankly, that patient may also present with elevated anxiety as a feature of their MDD. They're telling us that patients like that young adult or an older adult that can't really stand to be on chronic therapy for the rest of their life and is really looking for a therapy that works rapidly and lasts, that may be another particularly good place to go. So there's a number of patient types that we've heard, but again, it's pairing coral with the other work that we have and really reinforcing the opportunity to make a difference in the lives of patients who need a therapy like seranolone.

Thanks, Chris. Thanks, Jim.

Thank you. Our next question comes from Corey Cosmos with JP Morgan. Your line is open.

Hey, good morning. Thanks for the question. This is Tiffany on for Corey. Just one on 718. So with multiple large randomized Phase II trials and these different indications after the year and a Phase III in Huntington, can you characterize what you would consider meaningful results in each of these three populations? And we're also just interested in how long these trials last. will take, is it fair to expect data in 2023? Thanks.

Yeah, Tiffany, I'll start, and I'll ask Jim to comment further. So, yeah, 2023 is certainly possible, although when, you know, as we start trials, it's really important to get sites up and running and understand what accrual rates look like before we can provide proper guidance. And we'll do that as soon as we can. But let me take a step back. So SAGE 718, as you highlighted, is a first-in-class trial. a positive all-star modulator targeting NMDA. We are studying Sage 718 to demonstrate the improvement in cognitive impairment across a variety of neurological diseases. And as we highlighted in the call and in past calls, we have seen data in Huntington's, Parkinson's, and Alzheimer's consistent with the ketamine placebo control study where we saw significantly significant impact between placebo and drug And the data that we're seeing across all three neurodegenerative diseases is consistent with that. You mentioned the word large trials. So, you know, unlike drugs that are trying to demonstrate changes to disease progression and, in fact, are studying the slow decline of cognition over a long period of time, requiring long timeframes and big ends, we believe that the features of SAGE-718 will allow us to conduct shorter-term trials with a smaller end because we're actually measuring sustained or even improvement in cognition. So we're really excited across all three of these neurodegenerative diseases. Jim, you want to provide some more?

Sure, Barry. Just a little bit of detail around the dimension study for SAFE718. I think the key, of course, is to replicate the findings that we've seen from our earlier studies that Barry's referring to. We're actually seeing improvements in cognitive performance over a two-week or so period of time. So the dimension study, as will be the case for the PD and AD studies as well, is a three-month study, placebo-controlled, really looking to replicate that benefit that we've seen with SAFE718 in improving cognitive performance in both executive function and working memory domains. Thanks, Jim.

Thank you. Our next question comes from Yasmine Rahimi with Piper Sandley. Your line is open.

Good morning, team. Thank you for taking my questions. I would love to hear your thoughts as we head into the Skylark data, just to level set. Obviously, the Robin data in about 150 patients showed a four-point difference in HMD-17. The effects were continued throughout day 42. So, remind us as we head into Skylark, like what are changes that were introduced into the study compared to Robin? What should be our expectation given that this is a 50 milligram dose group and Robin ran 30 mgs? So I think I would love to hear your thoughts as we headed into the data, whether we should be expecting Equally as good Robin data, better than Robin data, and maybe some rationale around it could be helpful. Thank you for the long-winded question.

Thanks, guys. I'll provide some context, and then I'll ask Jim to really get into the details of Skylark and the changes. As you highlighted, we're using the 50 milligram dose in the Skylark trial, so it's a bigger study, higher dose, more centers. And I'll also highlight that PPD often presents as depression with elevated anxiety. So we're really enthusiastic about helping moms in the Skylark trial. Jim, you want to talk about some of the other specific differences and what we expect?

Sure, Barry. I think, of course, yes, the key point is the design of Skylark is intended to be similar to the design to Robin. So we haven't made that many changes in the overall study design. I think you've already highlighted The major one I would point out, which is the dose is 50 milligrams, where the dose in Robin was 30 milligrams. And what we've seen from other studies in the program, notably in the shoreline and waterfall studies, 50 milligram dose, as predicted, seems to have an impact in overall response in the positive direction, where in the waterfall study we saw a significant increase seemingly higher numbers of patients showing a beneficial effect at the 50-milligram dose. I think the other major element that's different in the Skylark study is the overall size of the study. So it is a larger study than the Robin study. So with those differences in mind, we're really expecting to see a similar kind of response in the Skylark study that we've seen in the Robin study. And I would also note the profile is similar to what we've seen in PPD studies with brexaniline.

Thank you. So, guys, we're really excited by, you know, opening the envelope for Skylark and moving forward PPD as well.

Thank you. Our next question comes from Laura Chico with WebBush Securities. Your line is open.

Hey, good morning, guys. Thanks for taking the question. Just a follow-up on Skylark. I apologize if I missed this, but I guess my question would be, can you just remind us around the powering assumptions for Skylark at both the 15-day and 42-day endpoint? I guess what I'm trying to understand is how we should be thinking about the magnitude of effect at both of those time points. Thank you very much.

Yeah, Laura, thanks. Jim, you want to take that?

Sure. Laura, as you know, we don't get into the specifics of powering assumptions for ongoing studies, but I think similar to the question we were just talking about, we really have been guided by results from earlier studies, most notably the Robbins study, and our thinking for the design of the Skylark study. So we're confident that we've got the study sized appropriately to demonstrate a significant difference for the Zorana loan at the key time points, of course, the primary endpoint being at day 15.

Right, and let me just, thanks, Jim, and let me just emphasize that, you know, we expect to see a statistical significant difference at 15. We don't necessarily expect to see that at day 42. The key here is that these moms get better fast and stay better. It's quite possible and can be expected that at day 42 the placebo arm catches up. Thanks, Laura.

Thank you. Our next question comes from Ani Fadia with Needham & Company. Your line is open.

Hi, good morning. Thanks for taking my question. Just with regards to, say, 718, could you lay out for us the clinical development strategy beyond some of the phase 2 trials that you are planning to initiate this year? What would be the next step, and how do we think about kind of the timeline and what would be the endpoints that the FDA would need for a indication and MCI across Huntington's, Parkinson's, and AD. Thanks.

Yeah, Ami, thank you. And thanks for your note this morning also. I'll start and I'll ask Jim to elaborate further. So, you know, as you've highlighted, I mean, we've started the Phase II studies with Huntington's disease, and it's a program rather than just a single study. And as we articulated, we plan on starting the Phase II Parkinson's study mid-year this and the Alzheimer's study more toward the end of the year. We are starting with Huntington's because the biologic hypothesis of stage 718 started with Huntington's, but it also is advantageous for us to start in a disease where we have fast track, but that's also an orphan disease because we can work with the agencies to make sure that we have the endpoints that matter. And to be frank, if the phase two studies are wildly positive, we will certainly work with the agencies to understand next steps, including potential registration on top of those Phase IIs. It's likely that with Parkinson's and Alzheimer's, we'll require bigger or Phase III studies. Jim, do you want to talk about endpoints and how we're thinking about Cognex and specific disease endpoints?

Absolutely. Yeah, and, I mean, as we think about the development program for Stage 718, We talk a lot about following the science. As Barry mentioned, in each of the different indications, we do have good evidence for both NMDA receptor involvement in those patients, but through our earlier work also showing some reasons to believe that CH718 is improving cognitive performance for all these patients. And then it really is also about efficient design. So Barry mentioned in the case for Huntington's disease, This makes sense from the science point of view, but also offers a different pathway forward with an orphan population. I think we'll have to see in the PD and AD patient populations what the path beyond the next set of studies looks like, but we tend to think in terms of what we would call serially de-risking, so we're adding to the evidence that we have with this very novel mechanism of action. To that point, as we think about endpoints, The primary endpoints in this set of studies are designed to directly follow up on the work that we've done in our Cognex program. But we're also very well aware that the FDA and other regulatory agencies are interested in understanding the real-world benefits of improving cognitive performance. So in our studies, we're also looking at ways of bridging to measures of function that would be meaningful for patients with these various disorders. So there's several things going on as you enter this phase. Really, the main effort is to show a significant benefit in cognitive performance relative to placebo, but we also will be looking at understanding how that translates into benefits that are meaningful to patients. And we think that will be an important part of the program moving forward.

Got it. And then just a quick follow-up. So in Huntington, would a three-month endpoint be adequate for approval? Do you have visibility at this stage about that?

Yeah, I mean, not quite yet. I mean, we are engaged with the agency to talk about durability. You know, again, we're doing something that's never been done before, demonstrating the potential improvement in cognition, which we think we can demonstrate over a short period of time. We've seen it in a couple weeks. We now want to demonstrate it across three months. And As I mentioned, if the studies are very positive, you know, we'll be aggressive in working with the agencies to figure out how we can get this drug to more Huntington's patients to start.

Got it. Thank you.

Thank you. Our next question calls from Paul Matisse with Stiefel. Your line is open.

Hey, thanks so much for taking my question. I wanted to use this opportunity to maybe ask about sort of the two bear cases that are floating around in SAGE with the stock where it is, and maybe one on the regulatory side and one on the commercial side. On the regulatory side, I think the question I get a lot, I'm sure other analysts do too, centers around the as-needed dosing approach, Shoreline, and whether or not with the totality of the data, physicians and regulators are going to have enough information on how to dose the drug and how to kind of think about, in Shoreline, there was this six-week interval between doses and how will that all sort of play out in the real world in depression practices? And then on the commercial side, I think the other area of skepticism, right, is an overarching view that changing the treatment paradigm is hard, generating use for a new branded drug that's more expensive in primary care practices is hard, and that maybe the lower hanging fruit, you could argue, would be in treatment refractory patients or pricing higher and really prioritizing PPD and MDD subpopulations. And so I'm sure you guys have heard this a lot. I certainly hear it a lot. And I would love your perspective on both of those issues. Thanks so much.

Yes, Paul, thanks for the question. So let me start with both regulatory and commercial, and then I'll ask Jim to comment further on regulatory and Chris to comment further on commercial. So I'll remind you that at the beginning of last year, we articulated that we designed a landscape and nest program in conjunction with the FDA, two studies in MDD, one in PPD, any one of which is positive constituted a filable package. In the fall of last year, following a positive waterfall, we reiterated the consistency of discussions we've had with the agency that waterfall constituted a filing package. However, there were two outstanding studies, one in MDD, coral, and one in PPD, Skylark, And they suggested, and we agreed, that we first file an MDD, including the CORAL study, and then the PPD, including the Skylark study. So we're thrilled, and we've discussed it, that CORAL was positive. Now, the other theme running through the year is that we observed in the literature that patients with MDD with elevated anxiety or anxious depression, as well-documented in the literature, were not well-served with current antidepressants. We did a retrospective analysis across patients our data and discovered that ziranolam was particularly useful in MDD, but particularly with MDD with elevated anxiety. And then we prospectively designed that population, that subpopulation, into the CORAL study. And that's about two-thirds of those annually diagnosed with MDD, not well served with antidepressants. So you can see that we have a very rich package for MDD. With a predefined subpopulation, MDD with anxious, elevated anxiety, the current state of the cure doesn't work well. So we're quite enthusiastic about the regulatory path forward. Obviously, following Skylark, we'll file an NDA for PPD. So we're really excited about both MDD and PPD and have a subpopulation in particular to guide potential treating physicians where the drugs just don't work well today. So it's not... It's not like I've got a whole bunch of opportunities in my arsenal to help these patients with MDD with elevated anxiety. And now turning to commercial, and Chris can highlight it, there's five particular patient types that are not well served with current antidepressants where Zoran alone, particularly those with MDD with elevated anxiety, can work particularly well. And also, we're leaning in with proactive value-based agreements. So what we're trying to do is work with payers to share risks so they have budget certainty and understand the right patients to treat with Zoranilone so that we don't get stepped, we don't get blocked. There isn't a whole lot of paperwork to make sure that a patient in need of Zoranilone gets it. So, again, you know, we've got work to do on the commercial side, but we particularly have ways that we're guiding potential prescribers on very specific patient types. So I'll end there. Jim, you want to talk more about regulatory and then, Chris, maybe pick up on the commercial piece?

Yeah, and Paul, I think what I would want to emphasize is when you step back and look at the program, we're talking about six positive trials at this point and eight trials overall looking at patients with depression, so 3,500 patients. And again, as you think about assembling the whole package of Zoranilone, we have data both as monotherapy, as add-on with co-initiation, with or without antidepressants, standard care antidepressants, multiple antidepressants, multiple patient populations, as Barry was saying, demographics across a very wide range, and truly a differentiated tolerability profile. As you think about all of those elements, of course, that was the original intent in the broad Landscape and Nest program is to provide a series of data points to help both providers patients, payers, an understanding of this differentiated nominal approach with seranolone. So we're very excited and we're very comfortable moving forward as we assemble this package that we have the right information to help people understand how to best use seranolone moving forward. Chris?

Yeah, thanks, Jim. And to add context, Paul, to what Barry already said in and around the commercialization thinking that we're currently employing, we're out speaking to practicing clinicians every day. We're talking to payers, whether they're national payers, regional payers, PBMs or IDNs, and certainly we're engaging with patients and patient advocacy groups to really understand what it is that they're looking for in a new therapy. And I think in Barry's remarks, he hit it really well. This is not a well-satisfied market. As I mentioned earlier, there's a substantial amount of switching going on because patients are looking for better options, clinicians are looking for better options for their patients, And payers certainly recognize that with respect to what they see at a plan level, that there is not a satisfied patient population there with respect to either the efficacy or the safety with the access that they have to currently available ADTs. And it's an even more dire situation in the PPD world where there are even fewer treatment options for those moms that are really looking for care. So with that being said, we recognize, and as I mentioned earlier in the conversation, that there are five patient types, you know, I'd spoken about the treatment-naive young adult and the older adult. There are many patients that are on ADTs that are still suffering. There are patients that are experiencing breakthrough symptoms associated with their depression because there's a death of a loved one or perhaps a job change. Or there are adherence challenge patients who, quite frankly, never get to really experience the benefit of their ADT because they don't have the time to wait six or seven weeks in order to see that benefit or the side effects deter them from ultimately reaching the efficacy that they so desperately want and deserve. So with that being said, as you think about it, MDD with elevated anxiety is a thread that connects many of those patient types, whether they're MDD patients or PPD patients, and we have an opportunity to do better with Zoranolone for all these patients and provide them with a rapid and lasting therapy that they deserve.

Thanks. Can I ask one quick follow-up? This is all really helpful. On Shoreline specifically, This is, I think, where, Jim, I just wanted to get your feedback on regulatory. You know, historically antidepressants, right, have been approved with acute evidence of efficacy, as you've alluded to, and then open label extension data. And this whole idea of maintenance of benefit is usually a post-marketing issue. But given the way this drug is dosed, right, I think the maintenance question comes into play probably earlier. Do you agree with that? And I guess... You know, if you're talking to a doctor and they say, hey, if I give this drug for a few weeks and the patient does better and then they feel worse three weeks later, how does kind of redosing work? Because I think in the Shoreline study you were restricted to not redose for at least six weeks. And I'm just wondering if this is a regulatory question or not or if you think I'm harping on something that's ultimately irrelevant. Thanks.

Jim, you want to start and then I can round it out? And thanks, Paul, for the question.

Absolutely. Yeah, Paul, so I would distinguish, of course, in a clinical trial we have very specific parameters in the protocol, but really the study was designed to address exactly the question that you're asking, which is, you know, what are the conditions on which subjects would need retreatment? And so we do have some very specific metrics in there that can be used, but I think really the important point is that, you know, what you're seeing in the study is that for the vast majority of patients, that actually is a relatively long interval, right? So you've got at 50 milligrams, the majority of patients over 50%, it's that one two-week course for a year. And you're up to about 80% when you look at one or two courses. So I think, yes, this is something that will need to be addressed in practice, but I don't think that it's going to be that complex a process for physicians to move to. And the study in Shoreline is designed to provide evidence that real-world evidence of exactly how to do that.

Yeah, and just to round it out, and thanks, Jim, just to round it out, you know, from a commercial perspective, Paul, we imagine that most of the patient population will be that two to four weeks of drug. There'll be very few that need the third, fourth, or fifth dose. And, you know, if someone takes two weeks and rebounds immediately, that's not how Zoranolin was designed. You know, for the 75% of patients that responded in Shoreline, it's for that group. There will be some where a different chronic medication may be more appropriate, and Zoranil is not the right answer. But, you know, for those patients, particularly MDD with elevated anxiety, we think Zoranil would be the right drug to reach for. All right. Thank you very much. Thanks, Paul.

Thank you. And as a reminder, please limit yourself to one question. Our next question comes from Tazeen Ahmad with Bank of America. Your line is open.

Hi, guys. Good morning. Here is my one question. So if you do end up in a discussion with the agency and the agency feels like maybe at least initially this drug might be best served for induction therapy and maybe you need to submit additional data over time, Is that a scenario that you've planned for, and how should we think about what the initial commercial opportunity would be if that's the case? Thanks.

Thanks, Nazeem. Thanks for your one question. So, look, we – and Jim highlighted this. With now CORAL, we have data in over 3,500 patients. We have data with geranol as a monotherapy. About two-thirds of the patients before CORAL were monotherapy. About a third – We're on top of a stable antidepressant. And then coral, as we've highlighted, was the first time we have data where Zoranilone was co-initiated with the five different standard of care antidepressants that Jim's highlighted. So we think we have a very rich package. The induction or not, so, you know, Zoranilone is meant to treat for two weeks, get someone better fast as measured at day three and keep them better. As we've already highlighted, shoreline indicates the majority of patients, you know, in this shoreline, which is, you know, more a real-world situation, only required two-week treatment. So, you know, induction or not, I think the majority of patients out in the commercial world will require two weeks in the course of a year, and maybe even longer. I mean, the shoreline study followed them for a year. I'll also remind you that we're rolling patients from coral onto shoreline. So it'll be quite interesting as those data roll out to understand what happens with Xeranolone coordination with antidepressant versus antidepressant alone and how many retreatments that group needs. Chris, anything to add?

Yeah, there's something that I would add, and I think, Barry, you covered it really thoroughly. But taking a step back, clinicians want to send patients home with a solution when they prescribe a product, and they want that solution to work rapidly and to last over time. And quite frankly, with respect to the data that we've already demonstrated, we've seen that this therapy works rapidly as early as day three. It sustains effect out to a year. And it has a safety profile that is unmatched with respect to some of the other therapies that are out there with respect to sexual dysfunction and weight gain or the fact that we haven't seen it with serenolone. And the ability to take this over the short course is incredibly desirable for patients who don't want to be on chronic therapy in perpetuity. for the rest of their lives. So we believe that with what we're delivering, we are delivering a therapy, putting it in the hands of clinicians to ultimately enable patients to go home with a solution that as early as day three, they'll know that it works.

Okay, thank you.

Thanks, Suzanne. Thank you. Our next question comes from Yatin Sunja with Guggenheim. Your line is open.

Hey, guys. Thank you for taking my question. So question is on the, you know, future application or additional application of Zoranilone. So specifically in anxiety, I think across the landscape studies, you have seen benefit in patients that have elevated anxiety. What is your view on evaluating, you know, maybe think studying Zoranilone in acute anxiety? And can you also talk about like other indication? I understand MDD, PPD. are very big opportunities, but, like, other indications, other applications of this pathway. Thank you.

Yeah, thanks for the question. I'll start, and I'll ask Jim to kind of round it out. So, you know, as we talked about before, and you just said, you know, we've got almost 7 million people per year in the United States alone that are diagnosed with MDD and prescribed an antidepressant, and one in eight women experiencing a live birth experience PPD. So those opportunities are very large. Our strategy, along with our collaborators, is really to do what we need to do to win in MDD and PPD, including a robust Phase III B4 program following what we hope to be an approval of Zoranolone. So that's the strategy. Now, there are other areas that we've talked about developing general anxiety disorder, seasonal anxiety disorder, which will be things we'll be talking about in the future. But the real focus is to make sure that we have all the data we need to continue to provide the marketplace for appreciation of how to best use Zorano Loan and MDD and PPD. Jim, you want to add?

I would only add that we are, certainly we have additional endpoints in our studies that we use to sort of fully understand the overall profiles of Zorano Loan, but to Barry's point, There's a significant focus on the indications that we're currently talking about. We are continuing to collect data on anxiety benefits. We've talked earlier about the benefits of Zoranlun on sleep. So, of course, there are additional effects of Zoranlun that we think could be of benefit, but those are for later evaluation.

Got it. Thank you. Could I squeeze one more? It's on the P&L for Kimmy. Um, um, so with, with most of the studies or phase three studies now behind us, can you just help us model, uh, R and D going forward? Should we expect it to go down? I understand you give, uh, the cash guidance and also about a GNA or S GNA, you know, as you start thinking about commercialization, is it like a second half, uh, ramp up, uh, just help there. Thank you.

Yeah, let me, let me start. So as, as you very well know, you know, we're partnered on, Zoran alone and Sage 324 with Biogen and get significant reimbursement for our efforts. And, of course, Biogen is doing the heavy lift, ex-U.S., for both programs in which we get royalties. So we're very enthusiastic about that partnership. As we've highlighted, Sage 17, particularly starting with an orphan disease like Huntington's, is a product that we can globalize on, and that's our strategy. We will, you know, assuming positive data, strong data, approval package, we intend on bringing Sage 718 to as many countries as it makes sense for us to do, given the success of Zorana Loan 324 on our balance sheet. So we do plan on recognizing revenues from multiple countries around the world in the future for Sage 718. Kim, do you want to take the rest?

Sure. So the question on expenses and what to think about there, you know, during the year that we did talk about the fact that we believed our operating expenses were going to increase, and that really related to the execution of our expand and accelerate strategy, some of which Barry just highlighted with stage 718. When you look into 2022, we're going to have three clinical trials across three indications in stage 718. So that will be a big program for We're also, and we committed to making additional investments in our early clinical and research engine. You know, again, there is where we want to, you know, really leverage what we have, our expertise in brain circuitry and making sure that we have our next clinical candidates. So those, you know, the expand and accelerate strategy will continue to execute in 2022. So that, again, will, you know, lead to increases in R&D expenses over the year. On the SG&A front, you know, we will see additional increases in SG&A, again, as we continue to ramp the prelaunch activities together with Biogen.

Thank you so much.

Thank you. Our next question comes from Douglas South with HC Wainwright. Your line is open.

Thanks. Good morning, and thanks for taking the questions. I was just curious in terms of the CORAL data, in terms of the day three benefit that we saw, was there sort of a disproportionate benefit in any of the domains of MDD? And I'm just curious, you know, how big a contributor to the improvement was some of the sleep components? And also, I guess, perhaps, Barla, do the areas sort of where you really see improvement change from day three to day 15? Thank you.

Yeah, thanks for the question. So I'll start and then Jim, maybe you can carry it down. You know, we presented top line data will certainly present breakdowns of components of handy 17 in future Congresses. But as we've seen in saw improvement across most of the domains in him, the 17, it wasn't just one particular feature or not. But Jim, you want to talk about your thoughts there?

I think that's the key point, Barry. What we have seen consistently is improvements across all of the domains of the HAMD17 with surround lump. And that will be the same thing for coral. We will, of course, be digging in more detail into individual pieces of data and communicating that as we go forward. So we will be looking at the distribution of HAMD scores over time. But I think the key point is that what we see is a pretty consistent picture of effectives around and across the domains of the HAMD. Okay, great. Thank you.

Our next question comes from Jay Olson with Oppenheimer. Your line is open.

Oh, hey, guys. This is Matt on for Jay. Thank you for taking our questions. Barry, I was going to ask you specifically a question. Just curious, since you joined as CEO, I believe since December 2020 already, just curious how you viewed the evolution of Sage since you took over and also if your vision for the company has changed at all since that time. and also just how you view personally the next three to five years. I really appreciate it.

Hey, Matt, thanks. Look, it's been phenomenal in terms of what everyone at SAGE has accomplished and how we work with our collaborators both in Japan and at Biogen and the progress. You know, when I started, as you mentioned, in 2020, we had three late-stage programs, Zaranon SAGE 324 and SAGE 718, and a number of studies in front of us. We stand here today with a robust pipeline. Those three late-stage programs are continuing to move forward. In fact, we're preparing to file the NDA for Xeranilone early this year. So, you know, everything we planned on doing is actually being – certainly being executed. You know, obviously, the weakness of biotech across the board starting in February last year certainly isn't helpful for any of us. But as you heard from me and from Kimmy – we have a very strong balance sheet to execute on or expand and accelerate. So the view that I had coming in that we could be the leaders in brain health and a top-tier biopharmaceutical company remain, we're on track to make that happen.

Awesome. Thank you. Really appreciate it. Thanks, Matt.

Our next question comes from Akash Tiwari with Jefferies. Your line is open.

Hi, thank you for taking our questions. This is Leo for Akash. Could you help us understand the real commercial opportunity in PPD? Obviously, the rental launch has been quite disappointing, but what have you learned from engaging that market? How many patients can you identify as a low-hanging fruit, and how many of those issues have diagnosing of these patients had been? What specifically about the rental loan would allow you to expand this market beyond the success the rental has? Thank you.

Yeah, thanks for the question. Chris, you want to start and then I can round it out?

Yeah, thanks, Barry. So as you may be aware, there are one in eight women who with a recent live birth experience have experienced postpartum depression. And that's not acceptable with respect to really those moms having to suffer through the symptoms of depression and as we noted earlier, the anxiety that's often associated with that. So with respect to the postpartum community, we know that there's an opportunity for us to do better with respect to our ability to provide them with a solution like Zolreso or subsequently Zorinolone if approved. So with that being said, we've learned a tremendous amount from our experience with Zolreso around how to engage with clinicians, how to engage with patients and patient advocacy organizations, and also how to engage with payers to assure the the availability and the access to medications like Zolreso, so that as we move forward, that we have a really strong knowledge base to build on that we can introduce Zoranalone into that market, into that community. Now, one of the questions you asked is the points of differentiation and how that may impact commercialization. Certainly, Zolreso, with respect to how it's administered in office, is very different from Zoranalone as an oral formulation that enables moms to take the therapy in the comfort of their own home over a a two-week short course of therapy in order to see the benefits that we've seen in our clinical studies to date. So with respect to how we see this evolving, it's going to profoundly change the way postpartum depression is treated now that moms will have the opportunity to take something that has the safety and the efficacy profile of Zoranolone. And as I said, there's a substantial number of these women who really need a therapy because right now in the marketplace, there is not something other than Zoraso that's meeting their needs.

Barry? Yeah, Chris, thank you. And let me just round that out. So, you know, because we're in the market right now, we are understanding really important pieces of how to treat the people. It's very important. Moms are taken care of by OBGYNs until the baby is born, and all focus turns to the baby and off the mom. So understanding pre-screening questionnaires that need to be put in place, they're available. Our Check on Moms program, making sure that every mom understands has a plan for the fourth trimester. A number of capabilities we're putting in place now will help. And really, many of the KOL's vision is to understand moms at risk and send them home with a prescription for Xarel and should they need it so they aren't in danger or endangering the babies or families. So we're certainly learning a lot, and we'll be well prepared to help, as Chris said, the one and eight live births that have potential to suffer from PPD. Okay.

Thank you.

Thank you. Our next question comes from Sumant Kulkarni with Canaccord. Your line is open.

Good morning. Thanks for taking my question. So what are some of the specific factors that might prevent immediate zolanolone retreatment? Is it patient response characteristics such as the average duration of maybe an MDD episode or more related to the pharmacology of the drug itself? I guess this goes back to what were the main variables that made you focus on 14 days of therapy versus, say, a more acute three days or 28 days to potentially ensure more durability?

Yes, Sumant, thanks for the question. Jim, you want to start, and then I'll, again, provide some color at the end?

Yeah, of course, Barry. And, Sumant, really, I wouldn't say that there are pharmacological aspects. I mean, what we're seeing is a rapid response to Zoranilone. And what you see by the end of that two-week course is is a pretty robust response and a response that has achieved its close to maximum response. So it was much more about the benefit being seen with that two-week course of treatment than anything to do with the pharmacology.

Yeah, thanks, Jim. And, Siobhan, again, I want to remind you that the observation that's been made by SAGE and collaborators is that neuronal networks are dysfunctional in very specific ways when people are living with depression. And Duranolone was designed to re-regulate those neural network spectrum normative states. And the two-week course of treatment was the course hypothesized to make that happen. As Jim said, we're seeing that happen very well in the majority of patients, as evidenced by Shoreline. Now, in terms of specific retreatment, you keep in mind that A patient will come in with a darkened mood, often elevated anxiety, inability to sleep. They'll know in two, three days that if Zoranilin is working for them or not. And, again, the majority of patients it does. And the instructions that the office will give is it should work in a couple days. We'll check in with you in two or three days. And after you're done your therapy, in the weeks following, if your mood darkens, your anxiety increases, your sleep is further disrupted, Let's either refill or call the office for a retreatment. It really will be pretty straightforward in the real world. Thank you.

Our last question comes from Vikram Parohit with Morgan Stanley. Your line is open.

Great. Good morning. Thanks for taking my question. So I had two on stage 324 questions. So for the Phase 2 study expected to begin in mid-2022, what can you say at this point about study design, particularly about which additional parameters beyond safety that you might anticipate evaluating here? And secondly, what level of regulatory interaction have you had on 324, and what do you think the path is to a pivotal program here?

Yeah, let me start, and then I'll ask Jim. The design for the Kinetic-2 study is in our materials on our slides, but quickly. It's a multi-mode study with the objective of having a dose and frequency to move phase 3, 2, 4 into a phase 3 study. We're studying tremor amplification or reduction in tremor amplification as well as activities of daily living at a 15, 30, and then 60 milligram dose. And for those that are on the 60 milligram dose, we're titrating over a very specific six-week period to do that. And we're looking at the kind of parameters we looked at for the kinetic study. I'll remind you that in the kinetic study, we saw a statistically significant reduction in tremor amplitude. We also saw a correlation between activities of daily living and reduction in tremor amplitude, which is very helpful for a path forward because it's likely that the phase three study will be that feel, function, well-being, activities of daily living type study. So that's how we think the path forward will look. Jim, anything to add?

I think what I would add, Barry, is conceptually, and Barry said it, the endpoint in the study is similar to the endpoint from the kinetic study, and that's important for continuity, but it's also important that we, as we think to pivotal studies, we also build that bridge to endpoints that are consistent with the benefit the patients are going to receive. So activities of daily living are will be an element of the study. So we have both the bridge to the primary endpoint that compares to back to kinetic, but also looking forward, we'll be looking at showing what are the benefits to patients in their daily lives that this reduction in tremor is providing.

Okay, got it. Thank you.

Thank you, and that's all the time we have for questions. I'd like to turn the call back to Barry Green for closing remarks.

Thanks, everyone. Thank you, Operator. We really appreciate everyone joining us today for the progress we made for all of 2021, specifically our fourth quarter. I'm grateful for the entire SAGE team, our patients, caregivers, clinical investigators, and all who dedicated so much to advance our mission to become a leader in brain health. I think the progress we made last year really sets us up for a strong 2022 and beyond. As I said on the call, I'm very confident that we are emerging as leaders in brain health And over the next couple of years, we'll be a top-tier biopharmaceutical company. Thank you.

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