Sage Therapeutics, Inc.

The conference will begin shortly. To raise your hand during Q&A, you can dial star 1 1. Good morning.

Welcome to Sage Therapeutics' second quarter 2022 financial results conference call. Currently, all participants are in listen-only mode. This call is being webcast live on the Investors in Media section of Sage's website at sagerx.com. This call is the property of Sage Therapeutics, and recording, reproduction, or transmission of this call without the express written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded. I'd now like to introduce Helen Rubenstein, Director of Investor Relations at Sage.

Good morning, and thank you for joining Sage Therapeutics' second quarter 2022 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 our 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 our progress during the second quarter. We will also be joined by Al Robichaux, our Chief Scientific Officer, who will review recent progress in development activities across our program. Chris Bonecki, our Chief Business Officer, will provide an update on our progress preparing for the launch of the rental loan in MDD and PPD, if approved. And Kimi Iguchi, our Chief Financial Officer, will review the financial results from the quarter. With that, I'll now turn the call over to Barry.

Thanks, Helen, and thank you, everyone, for joining us this morning. The first half of 2022 was important for SAGE as we continued our focused execution across our pipeline. We started the year by meeting our goals and achieving expected milestones on or ahead of planned timelines. We have a tremendous sense of urgency to create innovation and meaningful medicines for people who currently lack adequate treatment options. Our goal is to decrease disability and suffering while improving the health and productivity of people, their families, and the healthcare system. We're making progress across the entire company as we work to further establish Sage as a leader in brain health and a top-tier biopharmaceutical company. I'd like to now take a moment to review our progress in the second quarter and offer some context as to how we are thinking about the future of Sage. Starting with the depression franchise, we in Biogen recently announced positive results from the phase three Skylark study Evaluating Xeranolone in Women with Postpartum Depression, or PPD. We believe the totality of the data generated with Xeranolone support the potential of Xeranolone as a rapidly acting, generally well-tolerated oral therapeutic to treat major depressive disorder, or MDD, as well as PPD, with sustained effect. People with depression deserve new treatment options. We believe Xeranolone has the potential to deliver that important new option. With the placebo-controlled studies of Zoranolone in MDD and PPD reported, we are focused on completing the NDA filing for Zoranolone, which we announced the start of in May as a rolling submission. As we've shared, our NDA will include both MDD and PPD in one filing, and we believe this is an exciting opportunity to accelerate our planned submission of PPD, providing the opportunity to bring Zoranolone to people with MDD and PPD as efficiently as possible. Our planned filing timeline, if we receive priority review, provides us a possible PDUFA date for Xeranilone in the third quarter of 2023. Work is well underway and on track for the potential launch of Xeranilone in MDD and PPD. Strategically, we're thinking big about the opportunity in both MDD and PPD as we develop a focused launch plan, which we expect to scale with success. To launch successfully, We'll need to continue to deepen our engagement with key stakeholders around the profound unmet need that exists for those living with MDD and PPD. We plan to educate payers on the seranolone value proposition, which is supported by the weight of the clinical evidence from the landscape and nest programs. Lastly, we expect to further build internal capabilities intended to enable strong launch execution. We believe that if we continue to successfully act on these items, and execute on our launch plans. Clinicians will prescribe Zoranilone in MDD and PPD with a sense of urgency. Patients with MDD and PPD will ask for Zoranilone, and payers will enable access to this critically needed treatment. All of this is important if both indications are approved. To further support these preparations, we announced this morning that Chris Benecke has been promoted to Chief Business Officer. Christopher will provide more details on our ongoing commercialization preparation efforts later in the call. Additionally, we made progress during the quarter in our neuropsych franchise led by SAGE 718, a wholly owned first-in-class NMDA PAM. As you know, SAGE 718 is being developed as a potential oral therapy for certain cognitive disorders starting with neurodegenerative diseases, specifically Huntington's disease, Parkinson's disease, and Alzheimer's disease. Impaired cognition is a significant morbidity of these diseases and can have a dramatic impact on people's ability to live life independently and to thrive. We're committed to advancing the SAGE 718 program with the goal of further demonstrating its therapeutic potential and novel approach. Our neurology franchise, led by SAGE 324, is being evaluated as a potential treatment for people suffering from essential tremor and other neurological disorders. Movement disorders can make the simplest activities of daily life difficult, if not impossible. We and our collaboration partner Biogen believe, based on the data seen to date, we have the potential to make a meaningful impact on the ability of those living with a central tremor to fulfill activities of daily living. We've made encouraging progress across all our therapeutic areas in the second quarter and to date. We're closer to delivering our science to patients and creating value for society. ultimately advancing our mission to fearlessly lead the way to create a world with better brain health so every person can thrive. I want to thank the entire SAGE team, the patients in our clinical studies, their families, all those involved in running clinical studies, and our collaborators for the hard work and dedication. The next 18 months will be pivotal for us as we continue to execute on our Zoranolin program and across our broader pipeline, and we're excited for the journey ahead. Even in these extraordinary times, I'm confident we can deliver the next chapter in our success. With that, I'll turn the call over to Al for more detailed discussion of our portfolio progress and current clinical expectations. Al?

Thanks, Barry, and good morning, everyone. As Barry mentioned, we've made important pipeline progress during the second quarter. I'm pleased to detail our advancements as well as comment on our early development programs. Starting with our depression franchise, We announced in early June that the Skylark study of Zoranilone 50 milligrams in postpartum depression met its primary endpoint, a change from baseline in HAMD17 total score at day 15 compared to placebo, and all key secondary endpoints changed from baseline in HAMD17 total score at days 3, 28, and 45 compared to placebo, as well as change from baseline in the CGIS score at day 15. Notably, seranolone 50 milligrams demonstrated a statistically significant and clinically meaningful reduction in depressive symptoms compared to placebo as measured by change from baseline and HAN-D17 at day 15 of four points and a corresponding p-value of 0.0007. These results are remarkable and reinforce the data observed across the seranolone clinical development program in which treatment with seranolone resulted in a rapid reduction in depressive symptoms that was sustained throughout the follow-up period with a generally well-tolerated safety profile. The Skylark study underscores the potential for ziranolone to be an important and differentiated therapy, if approved, and completes the placebo-controlled trials in both our landscape and nest programs in NDD and PPD. We also presented data from a human abuse potential study with ziranolone in the second quarter. In this study, ziranolone 30 milligrams and 60 milligram, both doses in the therapeutic range, demonstrated lower abuse potential compared with Alprazolam 1.5 milligrams and 3 milligrams, and 90 milligrams of Zoranolone was comparable to Alprazolam. These data, along with our clinical data, support viable medical use and lower likability and abuse potential for Zoranolone. We do expect that Zoranolone will be a Schedule IV drug if approved. Findings from our market research have shown that clinicians are both experienced and comfortable prescribing Schedule IV drugs. I'd also like to highlight that we announced in early June that enrollment is complete in the Shoreline study of Zoranilone and MDD. Shoreline is the largest naturalistic study done to date in depression and is examining as needed intermittent dosing over the course of one year. We recently presented data from the previously reported cohort of the Shoreline study at the American Society of Clinical Psychopharmacology annual meeting. As a reminder, in the 50 milligram cohort of the Shoreline study, 80% of patients who responded to the initial two-week treatment with seranolone 50 milligrams only received one or two treatment courses during their time in this year-long study, with a median time to the second treatment course of 249 days. These data support our belief that seranolone can have remarkable durability. We look forward to sharing more data from the seranolone clinical development program in key scientific forums over the next several quarters. I'll highlight specifically our upcoming data presentations at the 2022 Psych Congress in September. In addition, we are sharing an update on both the Rainforest and Redwood studies today. As a reminder, the Rainforest study was designed to investigate the efficacy and safety of 30 milligrams of Zoranilone on sleep architecture and NDD, the same objective primary endpoint measured in trials of insomnia disorders. The Redwood study was designed to examine fixed schedule intermittent dosing 30 milligrams of xeranolone throughout the course of a year. This study was also designed to complement the shoreline study, which examined the as-needed intermittent dosing of xeranolone. Based on our discussions with the FDA at the time, we suspended both the rainforest and redwood studies in early 2020 before they were completed. These decisions were based on our plans to advance the program with the 50 milligram dose of xeranolone. Furthermore, we believe and confirmed with the agency that neither study is needed to support our NDA filing. That said, I'd like to share some high-level findings from these studies. Starting with the rainforest study, although terminated early, the study provides important insights on the potential effect of Zoranilone in the improvement of sleep parameters in patients with MDD. The study was not fully enrolled, with only 87 patients randomized. The rationality of the improvement in sleep architecture was clear, with Zoranilone 30 milligrams showing numerical advantage over placebo in objective measures of quality of sleep, including wake after sleep onset, total sleep time, latency to persistent sleep, median number of awakenings, median duration of awakenings, and endpoints involving REM sleep. Insomnia is one of the most common symptoms associated with depression, and disturbances of sleep are associated with decline in quality of life. It's very clear that improving sleep and depression is associated with better outcomes. making the findings from our rainforest study encouraging, as they suggest that Zoranilone may provide a sleep benefit to patients suffering with MDD. As many antidepressants can negatively impact sleep architecture, this would be an exceptional potential benefit of Zoranilone treatment. We believe that data across the Zoranilone clinical development program, along with the directional learnings from the rainforest study, reinforce that Zoranilone's mechanism of action may address multiple aspects of depression. including the core depressive symptoms as well as symptoms of anxiety and insomnia. Turning now to the Redwood study, the fixed scheduled intermittent dosing of 30 milligrams of Zoranilone, 53 patients with MDD were enrolled in the open-label phase of the study, and two patients proceeded to the randomized phase before it was terminated. Given the low number of patients randomized, there isn't enough data from the Redwood study to identify any trends. What we can say is that no additional safety findings were reported. In terms of retreatment, we do have data from another study in the Clinical Development Program, the Open Label Shoreline Study in MDD that I mentioned earlier. We believe these data afford the closest real-world evidence we have to date on the potential of seranolone therapy in the treatment of MDD and may help guide patients and healthcare providers in treatment choices if seranolone is approved. Additionally, in the shoreline study, for those patients who use one or more retreatments Efficacy and safety outcomes were similar to those observed in the initial treatment course. We look forward to sharing the data collected from the rainforest study, as well as additional data across the entire clinical development program at upcoming conferences. Now, I'd like to turn to our neuropsychiatric franchise, led by SAGE718, our lead NMDA receptor positive allosteric modulator that is an investigational oral therapy being developed for certain disorders where impairment of cognition is one of the main drivers of disability. Stage 718 is one of our wholly-owned programs and was granted fast-track designation by the FDA as a potential treatment for cognitive impairment in Huntington's disease, or HD. We also investigated stage 718 in people with mild cognitive impairment due to Parkinson's disease, or PD, and people with mild cognitive impairment and mild dementia due to Alzheimer's disease, or AD. SAGE 718 data have been consistent in demonstrated improvement on important tests of executive function across multiple open-label studies to date, including the paradigm and luminary studies in people with mild cognitive impairment due to PD and people with mild cognitive impairment and mild dementia due to AD, respectively. Additionally, in the placebo-controlled ketamine exposure study, subjects treated with SAGE 718 demonstrated statistically significant improvement on several cognitive tests including the two back tests compared to those treated with placebo at multiple time points. In our HD clinical studies, we are making progress in enrolling the phase 2 dementia study and the phase 2 surveyor study in people with HD cognitive impairment. We believe the complementarity of these two studies will help us understand the potential benefits of SAGE 718 in HD. The dementia study will evaluate the difference between treatment with SAGE 718 and placebo on cognitive performance in Huntington's disease The Surveyor Study, on the other hand, will help us interpret the clinical meaningfulness of the cognitive effects observed in the Dimension Study. Basically, the Surveyor Study will help us to answer the so what question, as in, so what do these cognitive effects mean for patients and activities of daily living, and what impact does Sage 718 have on their everyday lives? Based on the results of the Dimension and Surveyor Studies, we will consider opportunities to engage with regulators with the goal, if our studies are successful, to bring SAGE718 to people with HD cognitive impairment as quickly as possible, as there are no current therapies available today. Turning to our other clinical programs in neurodegenerative diseases, enrollment in the precedent study, a Phase II placebo-controlled study of SAGE718 in people with mild cognitive impairment due to PD is going very well. We also remain on track to initiate a placebo-controlled Phase II study with SAGE718 in people with mild cognitive impairment and mild dementia due to AD planned to begin in late 2022. We look forward to sharing data from studies complete with SAGE 718 to date at the upcoming European College of Neuropsychopharmacology and American College of Neuropsychopharmacology annual meetings later this year. Lastly, I'd also like to highlight recent advancement in our neurology franchise led by SAGE 324, 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, a disease that has limited treatment options for patients and has had no innovation for over 50 years. We are pleased to announce that we have initiated our Phase 2 long-term open-label safety study with Phase 324 and ET. The aim of this study is to assess the long-term safety and tolerability of Phase 324 over a multi-year period with the incidence of treatment-emergent adverse events as a primary endpoint. In addition, we are continuing to enroll in our phase 2B kinetic tube dose ranging study, evaluating SAGE 324 in ET to optimize the dose and frequency and continue to expect enrollment completion to occur in late 2022. As with our other franchises, we look forward to sharing data from previously completed studies with SAGE 324 in the coming months, including in our upcoming presentation at the International Parkinson and Movement Disorder Society Annual Meeting. To close, For me, it's been a rewarding journey over the last decade, and I'm proud of the team who has moved this dynamic pipeline forward. We're excited about what's to come in the next 18 months and believe our organization is poised to continue building on the momentum generated from the first half of the year as one of the leaders in brain health. Now, I'll turn the call over to Chris to provide additional context on our planned approach as we prepare for the potential commercialization of seranolone in NDD and PPD. Chris?

Thanks, Al. I'm pleased to be with you all this morning to share updates on our commercialization preparations for Zoranilone. Patients with depression urgently need new treatment options that are safe, work quickly, and offer lasting effects. An increase in the global prevalence of depression has been consistently reported since 1990, and approximately one in five adults in the United States will experience MDD at some point in their lives. Current treatments for MDD and PPD are often not adequate to address the profound challenges of treating depression. This on top of more people seeking treatment for depression, a healthcare system that fails to appropriately screen and assess, and a significant portion of the population failing to receive care. To put it simply, the current treatment paradigm relies on a try and fail approach that does not meet the needs of many people with MDD and PPD. Something must change because those who suffer from depression, many of whom are family and friends, deserve better. SAGE is prepared to be at the forefront of that solution. With our plans for a single NDA filing for Zoranolone that will include both MDD and PPD indication, we have a clear commercialization strategy which prioritizes stakeholder engagement, leverages disease state awareness, and builds capabilities that we believe will enable us to execute at a high level and scale with success. To rapidly and effectively reach clinicians and patients with MDD and PPD at launch, If seranolone is approved, we're working with our collaboration partner Biogen on an omnichannel approach that prioritizes digital channels right from the outset. I'd also like to provide some high-level thoughts on our approach to market access. Payers are telling us that the unmet need for patients with MDD and PPD is clear. The prevalence of depression continues to rise despite available treatments, and new treatment options that work quickly are desperately needed. In our early engagements with payers, we have also heard that they believe Zoranilone has the potential to be a promising new option for the treatment of both MDD and PPD, with a new MOA and with clinical data suggesting the potential to provide rapid and sustained relief in depressive symptoms for patients and a generally well-tolerated safety profile. To that end, we are thinking strategically about pricing and access and working to design an approach that considers the needs of payers, healthcare professionals, and most importantly, patients and their families. Our overall goal with Zoranolone, if approved, is to ensure that appropriate patients with MDD and PPD who are prescribed Zoranolone can quickly receive it. As such, we believe that it's essential that we work with payers to try to minimize barriers that can impact a healthcare professional's ability to prescribe Zoranolone to treat MDD and PPD so their patients have the potential to obtain rapid and sustained relief of their depressive symptoms. We look forward to sharing more details regarding our efforts to lay the foundation for the successful commercialization of Zorana Loan and an upcoming commercial spotlight event, which we plan to host later this year. Now I'll turn the call over to Kimme for a review of our financials. Kimme?

Thanks, Chris. Our financial results for the second quarter of 2022 are detailed in our press release issued this morning. I'd like to take a moment to provide some context and highlight a few key points. At the end of the second quarter, We continue to be in a strong cash position that we believe will provide our organization with the flexibility to make strategic investments across our franchises and support the launch of Zorana Loan approved by the agency. Our net loss for the second quarter of 2022 was 126.3 million. And we ended the quarter with cash, cash equivalents, and marketable securities of 1.5 billion. Turning to operating expenses, R&D expenses increased to $77.3 million in the second quarter of 2022, compared to $66.2 million for the same period in 2021. The increase in spend was primarily related to spending on stage 324 in our wholly owned pipeline, which includes stage 718. Looking forward, we expect R&D spend to continue to increase in the coming quarters as we advance the six planned and ongoing phase two studies with stage 718 and stage 324 that Al mentioned earlier. Importantly, the flexibility provided by our strong cash position allows us to invest in our wholly owned pipeline where our confidence is demonstrated by our advancement of three potential indications for stage 17 and continued work across stage 689, stage 319, and stage 421. SG&A expenses increased to $52.4 million in the second quarter of 2022, compared to 43.3 million for the same period of 2021. The increase is primarily related to hiring employees to support ongoing activities in anticipation of potential future product launches of our product candidates. As you heard from Barry, we are preparing for the potential launch of Xero Antalone, and we expect that SG&A expenses will increase as we continue commercial preparation. As part of our collaboration with Biogen, we're jointly developing durandalone and CH324 with a 50-50 cost sharing in the United States. During the second quarter, we recorded $23.8 million in reimbursement from Biogen related to our collaboration and license agreement. We believe that the work we're doing to prepare for commercialization now will provide an important foundation for our organization going forward, including potential future launches, with our wholly-owned programs if we're successful. Looking ahead into the rest of 2022, we're reaffirming the financial guidance that we provided earlier this year. We anticipate having cash, cash equivalents, and marketable securities of approximately $1.3 billion at the end of 2022. We do not anticipate receipt of any milestone payments from collaborations in 2022. We believe that our current cash, cash equivalents, anticipated funding from our ongoing collaboration, and potential revenue will support operations into 2025. Despite the uncertain market environment we all face, Sage continues to act from a position of strength. I'm confident that we'll continue to execute throughout the remainder of 2022 in our pursuit to deliver life-changing brain health medicines so every person can thrive. Moreover, our approach to stage enables quick decision making, facilitating discipline investments that we believe will provide value over the long term as we execute our efforts to lead in brain health. While we're thinking big about this rental and opportunity, we're very mindful of the capital allocation prior to launch. We plan to invest appropriately and be prepared to scale with success. 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?

As a reminder, to ask a question, you will need to press star 1 1 on your telephone. Please stand by while we compile the Q&A roster. Our first question comes from Salveen Richter with Goldman Sachs. Your line is now open.

Hi. Thanks for taking our question. This is Tommy on for Salveen. And our question is about rainforest. While rainforest was terminated, are there plans to share the data with the agency? Is there the possibility that findings from the study could be included on the label in some way? And are there plans to restart these studies with the 50 milligram dose? Thank you.

Yeah, Tommy, thanks for the question. So we will be presenting data from the Rainforest study, which, as you mentioned, the 30 milligram dose was terminated early. We made that decision in conjunction with the agency. And as a reminder, neither Rainforest or Redwood data are required for the NDA filing. Of course, those data will be shared. The data we saw in Rainforest was consistent with the totality of data seen to date with xeranolone. reduction in depressive symptoms, reduction in anxiety, and importantly, this is what's specifically being studied, improvement in sleep and sleep architecture. It's too early to talk about exactly what's in the label or what we'll be able to use in promotion, but these findings will be important as we commercialize Xaranolone. Chris, anything to add?

No, Barry. We're excited about the opportunity, and we'll continue to see the impact of Rainforest as we take future opportunities moving forward.

Thanks, Tommy. Thank you.

Our next question comes from Ritu Baral with Cowen. Your line is now open.

Good morning, guys. Thanks for taking the question. I wanted to ask about how confident you feel about the regulatory pathway that you're going to be embarking on shortly, specifically, you know, if there are any learnings from the Axome precedent and the ongoing Axome review that you've taken away or that you've gleaned that will better prepare you for what the FDA wants on the outset versus in the process.

Yeah, Ritu, thank you for that question. I would say we're highly confident in the interactions we've had with FDA. stemming back to 2020 when we outlined the landscape and nest programs. We've confirmed multiple times with the agency the totality of the data required for NDA filing. We started that rolling submission in May of this year and plan to complete a single filing for both MDD and PPD by the end of the year. I can tell you that all modules are in hand and going very well. The non-clinical CMC modules as well as the clinical modules are all well on schedule. Obviously, there are things that can happen that are unforeseen, but we feel very good about all the modules that are in preparation and the interactions we have with the agency. And I believe that a fast-acting antidepressant that's oral and short course is desperately needed in the world today, and we believe the agencies understand that.

Have the conversations still been interactive, relatively real time, I guess?

I'd say there's regular interaction and updates with the FDA. There's both the formal and then informal kind of email interactions. But yes, there's been regular interactions and things are going well. We anticipate the filing by the end of the year. And as we set on the call, if we get priority review, a PDUFA date in the third quarter of next year. And we're excited for the interactions.

Great, thanks.

Thanks, Ritu.

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

Hey, thanks so much. Following up on Ritu's question, on the regular... on the regulatory side, can you clarify how are you framing shoreline in the NDA? Are you framing the study as a maintenance study or are you framing this as sort of a broader open label safety study with more qualitative conclusions? And then to that point, what are you proposing for redosing in the real world? Are you proposing something that is as restricted as shoreline where you have to wait at least six weeks and you have very specific criteria for monitoring Are you kind of proposing a paradigm where physicians have a lot more discretion than that? Thanks so much.

Yeah, thanks, Paul, for the question. So let's, Shoreline is the largest naturalistic study ever run in depression. It's a study where patients were enrolled and then asked every other, every two weeks how they were doing. And as you're aware, 80% of those enrolled in Shoreline that responded required only one or two two-week course in the course of a year. So two to four weeks of drug in the course of the year. And a majority of those that responded shoreline only needed one course of treatment in the year. And of course, re-treatment for patients that responded was consistent and no additive safety issues. So the totality of the shoreline data will be included in the NDA filing. It's a large safety database, and we believe it will be instructive to clinicians on when retreatment can be used. And I'll ask Chris to comment on how this is a paradigm shift in the treatment of depression, but not necessarily a paradigm shift in a clinician's practice. So we're gonna submit this shoreline as the safety data. We believe it will be instructive to retreatment. It's a little early to talk about exactly what will be in the label or the guidelines for retreatment. But I'll remind you that physicians can use Duranolone or any other approved drug as they see fit and as they learn more about the opportunities of how to use these medicines. Chris, you want to talk about impact to practice?

Yeah, sure. Thanks, Barry. So the profile seen with Duranolone in clinical trials to date, in particular the landscape studies, have demonstrated that with respect to Duranolone, we've seen rapid and sustained reduction in depressive symptoms and a generally well-tolerated safety profile with a short 14-day course of treatment after the way the physicians have prescribed the product. So with respect to the product being used, this will enable physicians the opportunity to offer patients treatment-free periods in between depressive episodes so that patients don't have to take medications on a chronic basis. Now, what we've heard from key opinion leaders that we've engaged with in market research, this in and of itself is an advancement in treatment. Functionally, with regard to how they've been treating depression, this is a change in the treatment paradigm. But this does not really reflect a change in the way that physicians are actually managing patients. What we would expect is that with Zoran alone, that a physician would prescribe the patient a two-week course of therapy. They would check in with the patient at the end of that two-week period where they would hear about the efficacy and the tolerability profile of the product. patients would then go on to experience symptom-free life, and as needed, at the six-month period, the patient would then check back in with the physician with an update. Now obviously, in between that two-week period and six-month period, if there were one of the home symptoms of depression, if that were to return for the patient, the patient then certainly would reach out back to the clinician, and the clinician could prescribe the second two-week course. So, again, as I said, you know, this really reflects a change in the treatment paradigm, not a change in the way that clinicians are actually managing their patients. And we're very excited about the opportunity to introduce this as we hear from clinicians they're waiting for Zoraniline.

Thank you. And I really do just want to clarify on the regulatory side. Given the whole back history with Redwood and the utility of that study versus Shoreline, do you look at Shoreline as a maintenance study with the ability to have maintenance claims from that? Yeah, just trying to get a little more specific there.

Yeah, Paul, thanks. So, again, we're going to submit Shoreline as part of the filing. It's a large safety database. We believe it will be instructive to a retreatment. When we met with the agency, and I think it was the fall of last year, we confirmed that Shoreline would be sufficient as part of the filing, and the Redwood study no longer needed to be run because we had sufficient data of retreatment. We'll provide more as we interact with the agency and get into label negotiations.

Okay.

Thanks, Eric. Thanks, Paul.

Thank you. Our next question comes from Ami Fadia with Needham. Your line is now open.

Good morning. Thanks for taking my question. Maybe just a follow-up to the previous question. do you anticipate the indication for the product to be just treatment of depression, or would it be classified as something more specific, such as acute treatment, and do you expect the FDA to limit the number of treatments in a year? And then I have a question on the pipeline.

Ami, thanks for the question. So, in terms of specifics of the label. Again, it's too early to talk about label specifics until we really get into it with the agency. We've said previously, and we anticipate an indication statement, something like for the treatment of MDD and PPD, so pretty straightforward, pretty straightforward indication statement. As we talked about with Paul's question, we believe Shoreline will be instructive for retreatment. We've got data up to five retreatments in the course of the year. And we believe that the total data set will be instructive for retreatment. As Chris highlighted, the normal course of practice would be to prescribe medicine, in this case, if it's Zoranolone, rather than instructing the patient that, you know, hang in there. This could take four to eight weeks to work. We believe that patients will be instructed that please take this at night with your dinner. You may feel better in two or three days. Take the full two course. And as normal, I'll check back in with you in two weeks. If your darkened mood, anxiety increases, or sleep disruption occurs again, please check back in. Otherwise, we'll see you in six months. So as Chris highlighted, in the normal course of practice. And if there's a retreatment required, we believe that we've got data that instructs on retreatment.

So Barry, do you still anticipate an outcome or that's less clear at this point?

No change in anticipation or not. Whether an adcom is used or not, it's a sole discretion of the agency. There's no regulatory statute for exactly how or when they share with us. We think that we'll learn more clearly after our NDA filing and, again, if we get prior review of a DUFA date in the third quarter of next year. Of course, we're preparing for an adcom. And we are going to be very well prepared if they choose an ADCOM. If they don't want an ADCOM and it signals speed of approval, that would be great. If they do hold an ADCOM, we look forward to that as well, because it'll allow us to feature the totality of the Xeranolone data and really put it on display.

Got it. I guess I've asked roughly one or two questions, but maybe just one quick one on 718, when do we anticipate data from any of these ongoing studies? And if you start to see positive data come through, would you anticipate developing all of these three indications on your own, or would you consider partnering? Thank you.

Yeah, thanks, Ami. We're really excited by the SAGE 718 program, a first-in-class NMDA PAMP. We recently announced the initiation of studies for SAGE718 in Huntington's, mild cognitive impairment, and MCI due to Parkinson's disease, and we anticipate starting a placebo-controlled Alzheimer's study by the end of the year. And as you're well aware, we presented data from the various studies showing consistent improvement in executive function learning and memory. So as we get these studies up and running and enrolling, we'll provide further guidance you know, exactly the timing of data readouts. In terms of Phase 3s, that's something that we'll make a determination on once some of the Phase 2s read out. Clearly, the Huntington studies have been designed in a way that, if positive, we'll meet with the agency to discuss the fastest way of getting Stage 718 to the market.

Okay. Thank you. Thanks, Ami.

As a reminder, in the interest of time, we ask that you limit yourself to one question and rejoin the queue for any follow-ups. Our next question comes from Jay Olson with Oppenheimer. Your line is now open.

Good morning. Thank you for the update and for taking the question. Can you please remind us the original objectives of the Redwood and Rainforest studies and whether or not you plan to continue pursuing those objectives and whether any of those study results are going to be included in the NDA filing. Thank you.

Thanks for the question, Jay. Let me first comment that the discussion you led with Greg Mattingly was just outstanding. Thanks for doing that. I think it really highlighted how someone who uses Zoranil and thinks about that drug. That was very instructive, not only for us, but I think for many in the community trying to understand the use of xeranolin. So thanks for that. In terms of rainforest and redwood, we don't anticipate running a redwood study now or any time in the future. As we've highlighted, we believe that the retreatment data in Shoreline, which will be part of the submission, will be instructive not only from a safety database perspective, but in terms of how retreatment can be used. In terms of rainforest, with the study MDD, those with insomnia, We directly saw very positive results consistent with the totality of the xeranolin data. And that's a study we might run in the future. We have more to do with our collaborators, Biogen, to outline the unmet needs in the phase 3b4. So stay tuned for more on that later. Great. Thank you. Thanks, Jay.

Thank you.

Our next question comes from Yasmeen Rahimi with Piper Sandler. Your line is now open.

Hi, this is Swapnil on for Yas. Thank you for taking our questions. So regarding the shoreline study, you mentioned that the median time to the second treatment course was 249 days. Can you tell like what's the shortest and the longest duration before which the patient needed the second dose? and what's the longest time duration for safety analysis in the shoreline to date? Thank you.

Yeah, Swapnil, thanks for the discussion. So shoreline is a very instructive study. Again, it was the largest naturalistic study run to date in depression. We've enrolled over 1,500 patients, and it was a one-year duration study. So The majority of patients that responded in Shoreline required only one two-week course in the course of a year, and 80% of patients had one or two two-week courses in the course of a year. So it really speaks to the effectiveness and durability of Shoreline. The fact that the median time to retreat was 249 days, I think it's demonstrable that the majority of patients' first depressive episode was treated and treated well. And then potentially another trigger event caused another depressive episode requiring a retreatment. But again, the majority of those responded did not require a retreatment. In terms of short and long duration, we'll be providing more data as we present at ASCP, more details for shoreline and meetings to come.

Thank you.

Our next question comes from Yatin Suneja with Guggenheim Partners. Your line is now open.

Thanks for taking my question. Just a question in line. I mean, we've recently seen the HAP study, so just trying to get a sense of some of the DDI work that you might have done. Can you just comment on that? And also, you know, you're showing positive impact on sleep, across multiple studies. So can zeronalon be combined with some of the sleep aids or sedative angiolytics that are out there? So just trying to get a sense of the combo use. And also, if you can characterize some of the driving study that you might have conducted, what were the key findings? Thanks.

Yeah, Yatin. So I guess a few questions there. Let me start with HAF and driving. And I'll ask Al to comment on the drug-to-drug interaction study. So any CNS drug entering the market must be analyzed for abuse potential. The HAP studies are one of the standard elements used by the agency when considering abuse potential for CNS active medication. And as a reminder, there's a 90-day DEA review period following, if it happens, BDUFA approval. So the HAP study was around and was consistent with the FDA guidance on this type of study. And we expect the FDA to consider data from the HAP study and the entire development program of ziranolone for recommendation to the DEA. We believe that given what we know and the brain penetrance of ziranolone, that will be a Schedule IV drug, which is not an issue for prescribing. And again, you know, we're entirely excited about the totality of ziranolone in both MDD and PPD. Clinically meaningful reductions in depressive symptoms, with consistent improvements in mood and anxiety, the rapid onset of action, which we've talked about as little as two or three days, the two-week treatment course, and the well-tolerated potential certainly is an oral therapy that we clearly believe the world needs. In terms of driving studies, those are complete and will be part of the submission. They're, I'll call them checkbox studies that require to be run. We anticipate, as in many drugs, including over-the-counter drugs, There'll be a warning in the label, something like, please don't operate or drive or operate heavy machinery until the full use of the drug is known. That's consistent with many drugs, even drugs like Benadryl, which are used over the counter. Al, you want to talk about the DDI studies?

Sure, Larry. Great question. You know, we call it most of these studies that we've done in the past, most of the we've done in the past where many of the patients were on antidepressants at the time. So what we've seen consistently throughout all the studies that we've seen no differences in response or safety profile of those patients on whether they're on another drug or they're not. In addition, you recall the CORAL study was run concomitant with a dose of an antidepressant. And we, again, saw pretty much the same response as well as the safety profile of those molecules not counting. side effect associated with the antidepressant. Our preclinical data and all clinical data suggest that we don't see any issues with dosing the compound with other antidepressants, as I said, and most of our clinical trials had patients in them on stable antidepressants. So it doesn't prohibit the use, and we don't see any differences in the response rate between those two patient sets.

Thank you. Our next question comes from Mark Goodman with SCB Clearink.

Your line is now open.

Yeah, hi. You mentioned about the launch and how you're going to scale appropriately with respect to spend. Can you give us a little more color what you mean? Are you trying to say that we should not expect... 500 person Salesforce between the two companies and, you know, aggressive TTC on the TV, you know, is six months after launch, or are you trying to say that it's going to be something different than that? Or maybe you could just give us a sense of what you meant there. And then just on dimension and survey, what's the timeline, best timeline you can tell us for when you think those phase twos will read out? Thanks.

Thanks, Mark. And I'll ask Chris and actually Kimmy to comment as well. So, what what we're what we're what we're saying is we in biogen are actually thinking very big about the mdd and ppd opportunities and we'll use an omni-channel approach uh you know leaning in on digital to start but we're also saying that that we're going to be smart about capital allocation and think about starting at an appropriate size with salesforce with dtc and other omni-channel tools and then scale with success i think it's a best practice to um to put the right capital allocation to launch. And as you see uptake with psych, with primary care, to continue to scale with that uptake rather than scale ahead of that uptake. Lessons learned from many, many drug launches that sometimes companies overcapitalize the launch. So we're being very clear that we're going to spend appropriately to launch well, and we anticipate success of launch, and then we'll scale with that success rather than scaling before the success. Chris, Kimmy, anything to add?

Yeah, Barry, I'll take it first and then I'll pass it over to Kimmy. So with respect to what we've learned from key opinion leaders and clinicians from both market research and scientific exchanges that functionally they want faster relief and they want a therapy that can not only deliver that fast relief but sustain that relief over a period of time without the stigmatizing side effects associated with other antidepressants that they've become all too familiar with over the last 30 to 35 years. With that said, that in and of itself is something that we've seen from Zoranolone over the course of the landscape and nest studies. With respect to our go-to-market approach, it's going to be absolutely important that we get out there quickly with that message, with the data that we have to reach those clinicians that you talked about getting to with an omnichannel approach, also making sure that we're able to reach patients with that message around what Zoranolone has the potential to deliver. without saying but I will mention that it's important for us to think about educating and proactively partnering with payers to make sure that they're aware of the rent alone at its approval and what it ultimately can deliver is you might imagine we've already had those conversations with payers and will continue to stay engaged with payers educating and proactively preparing for the launches of rent alone with that that important stakeholder group Kimmy yes so so mark I think you know again your question around and scaling is

is a great one right now, especially in this environment. We're going to be very smart about how we ramp up our costs in the SG&A side, and that's part of that scaling Chris just talked about. But, you know, we're thinking about that across the entire organization. So, you know, even in the R&D space, we're thinking about it. You know, across G&A, we're thinking about it, is how to be very smart and disciplined in our investing. You know, and a good example of that was really the decision we made with Sage 904 to halt that program because it didn't meet the criteria that we had set forth. And so we're going to continue that. You know, we have a balance sheet, but we're still being very disciplined in how we think about investing our capital.

And, Mark, your question about SAIT 718, we highlighted earlier on the call the initiation of Huntington's, Parkinson's, and by the end of the year, the Alzheimer's study. And as those studies ramp up and sites come online and accrual is clear, we'll provide updates on when the data will read out. Thanks, Mark.

Thank you. Our next question comes from Vikram Parohit with Mark and Stanley. Your line is now open.

Good morning. This is Gaspol. I'm from Vikram. Thank you for taking our question. You mentioned in the release that no label changes for Xereso are expected based on the sunbird study. Could you provide a bit more detail on what you observed in the study?

Yeah, Gaspol, thanks for the question. So the SUNBIRD study was evaluating the safe use administration of Xeresso in a home use setting. As you highlighted, we don't plan to make any label changes. There were no new safety signals related to Xeresso identified in the study. It was kind of a human use potential study rather than a placebo controlled efficacy study. The study enrolled as expected and recruited on time. And importantly, the Sunbird study allowed SAGE to develop the operational capability to run a virtual or decentralized study model that we'll leverage in future studies. So we remain committed to providing optionality to moms with PPD. And we're really optimistic that, you know, particularly with the output of Skylark, that Ziranolone, if approved, will significantly improve access for women in need of treatment for PPD. Thank you for the update. Thanks, Gospel.

Thank you. Our next question comes from Gary Nachman with BMO. Your line is now open.

Thanks, guys. Good morning. So in your early payer discussions on Zoran alone, when you consider pricing, what will you assume for average number of treatment courses per patient per year based on the shoreline data and how you think that's going to factor into pricing and how payers are going to view the drug given its profile? And then just, I guess, more generally, you know, what is the market research telling you about each of the MDD and PPD opportunities? And where do you think Durandalone may have a bigger impact early on when it's launched, you know, both from a payer standpoint, also in terms of physician and patient desire for the drug? Thanks.

Thanks, Gary. Let me turn it over to Chris, and I'll loop back at the end.

Yeah, thanks, Barry. So with respect to the first question around pricing, obviously it's early to get into discussions specifically on where we're going to be with pricing. Sage and Biogen will provide that clarity on pricing in and around the time of approval if we're successful. What I can say is that as we think about pricing, we're thinking about it in relation to how it interplays with access at the same time. So with respect to both pricing and access, it's critical that we design an approach that considers the needs of payers themselves, physicians, as well as, importantly, the patients who ultimately make the product. Now, our overall goal, if Zorinolone is approved, to ensure that appropriate patients are able to get Zorinolone for both MDD and PPD, that they can get it when they need it, and that clinicians can prescribe the product without any sort of mitigation in the process. Now, what that means is that we as an organization need to partner with payers to make sure that things like prior authorizations and step edits are mitigated by virtue of the way that we collaborate and think about the contracting process. I know historically we've talked about opportunity for us to introduce proactive value-based agreements with this important stakeholder audience, and that's going to be an important piece of the strategy as we think about how we're going to make sure that the product is ultimately available. So we're leaning in on those VBA conversations that we're having right now in and around conversations around unmet need and the data that we've been able to demonstrate with respect to Landscape and Nest around how Zorin alone has the potential to offer a distinct opportunity for payers to make the product available for those with both MDD and PPD. So more to come on price, but we're thinking about the approach holistically in and around pricing and access. And again, making sure that we're educating and proactive partnering of payers with the goal of enabling at-launch access. I think the question around some of the opportunities and where we see a bigger impact with respect to HCPs, payers, and patients, taking a step back and thinking about the opportunity in the marketplace, with respect to depression, there are 21 million or so people that experience one or more depressive episodes in a given year. And given that number, there still are 7 million patients in MDD who are either new to therapy, adding therapy, or switching therapy. What we know from the market research is that given that there are a number of generic medications that have been available now for 30 to 35 years, there still is profound unmet need, and patients need new therapies with new MOAs like Zorinolone that offer rapid and lasting relief without the tolerability issues and the stigmatizing side effects that you see with other therapies that they become exposed with. all with just a 14-day course of therapy. Again, I think in MDD, for those patients that are new to therapy, adding therapy or switching, it offers a profound opportunity. Our opportunity there is to really make sure that out of the gate at the launch of Zorinolone that we are engaged with those clinicians and we demonstrate the opportunity to introduce Zorinolone early in the treatment process where patients can have the best expected effects with both MDD and with PADD. Now, with respect to payers, I covered all the payers and what I think the opportunity there is in and around to educate and proactively partner with those payers, so I'm not going to say much about that. And last but not least, I think Patience, I think, is very noted in his comments about our go-to-market approach. It's going to be really important from an omnichannel perspective that Patience early are aware of Xarelone. and the distinction that Zoranolone offers relative to perhaps the way that they've experienced other antidepressants in the past with respect to the rapid onset of action and the sustained relief all over just requiring a two-week course of therapy. So with that said, Barry, I'll hand it back to you to cover off on anything I may have missed.

Yeah, Chris, you covered it well, and Gary, I hope that that's the answer. I guess just a point on use. We believe that since Zolresto is the only approved drug in PPD and Zoranil, if approved, will be the only oral medicine that, if we do our job right, Zoranil will quickly become standard of care in PPD. One in eight live births, about half a million women a year experience PPD. And with an available drug, we do believe that diagnosis rates, risk factor assessments will go way up because now there's something to do about it. In MDD, Chris covered it well, there's a significant opportunity. There are some places where xeranolin will be used to interrupt the cycling of many antidepressants a patient's experience, and other groups like young adults where we believe that xeranolin should be used as quickly in the treatment paradigm as possible. But more on that to come.

Okay, great. Very helpful. Thank you. Thanks, Eric.

Thank you. Our next question comes from Nina Petrito-Garg with Citi. Your line is now open.

Hey, guys. Thanks for taking my question. I just want to go back to some of the questions on Shoreline that were asked earlier. I was just wondering if you could give us an update on how physicians that you interact with and the FDA are thinking about the retreatment criteria specifically that were used in Shoreline and how well that aligns with physician practice and how they would actually think about retreating a patient. I'm really just trying to understand if the one to two treatment courses per year will translate into the real world setting. Thanks.

Yeah, thanks, Nina. We believe that Shoreline represents a real world evidence study. The agency is looking for more and more real world evidence and Shoreline checks most of the boxes for what you're looking for with real world evidence studies. Keep in mind that patients were diagnosed with MBD. They were given drug for two weeks. Then on day 15 and on, they know they're not on drugs. So if there was a likability or any need to be on drug, we'd see a lot more retreatment. The fact that a majority of patients stayed well after one course of treatment for a full year is a testament to the durability of ziranolone, and the fact that 80% of patients who responded to the initial two-week treatment with Zoranilone 50 milligram only received one or two treatments the course of the year with a median time of 249 days. So as you heard from Chris, today's practice is to diagnose the patient, give them a prescription. Instead of instructing them to hang in there, this could take 48 weeks to work, I believe physicians will tell their patients that they should feel better and as little as two or three days after two evening courses of Zoranolone. And as it's done with practice today, physicians or offices often check back in two weeks. Today, they're checking back to understand the side effect profile and if any other drugs are required to minimize side effects, GI effects, potentially sexual dysfunction that's seen at that time. And then in this case, it's how patients are doing after the two weeks. And then classically, there's a six-month follow-up. So as Chris highlighted, this is a paradigm shift in how depression is treated, but not necessarily a paradigm shift in how a physician practices with their depressed patient.

Got it. Thank you. Thanks, Nina. Thank you.

Our next question comes from Stephen Mallon with RBC Capital Markets. Your line is now open.

Right, thanks. This is Steve on for Brian. Congrats on the progress, and thanks for taking our question. Curious if you can provide a bit more color on what you're expecting to see in the phase two work with the NMDA PAMs and how you'll think about making a go, no-go decision there on efficacy, especially given the significant variability and potential responses in running periods from the phase one. Looking for stats there on efficacy or just trends and what will give you confidence to move forward.

Thanks. Steve, thanks for the question, and thanks for the congratulatory note. I'll start and then ask Al to comment. So what's remarkable about SAGE-718, first-in-class, and MDA-PAM is that in the early work to date, the ketamine placebo-controlled studies, the Huntington's, Parkinson's, and Alzheimer's study, we actually saw a rapid improvement in cognition in a short period of time, either in two or in some studies, four weeks. We saw it in two weeks, but continued out to four weeks. As you're well aware, studies drawing in cognition to date or dementia to date have, with a very large end, with a very long time, tried to demonstrate, most not successfully, the slowing of cognitive decline over a period of time. So we're looking for improvement in cognition. If you think about the Huntington's study, where we're running parallel studies demonstrating the numerical change, but also kind of what it means in real life, we believe that that's, if dramatically positive, that translates into a package that we'd be enthusiastic to meet with the agency and talk about the fastest path to clinic. For the Parkinson's and Alzheimer's study, we're looking for a broad benefit-risk profile, trends in that improvement, but likely phase three studies to follow. So Al, anything to add there?

Yeah, Barry, I think it's interesting that Most of the studies that are involved with these diseases in the past with other drug approaches or other approaches are specific to those disease types. You have the specific studies trying to reduce A-beta or nerve cell retangles and other diseases, alpha-synuclein and the other diseases as well. Our approach is looking to improve brain circuitry and synaptic function. And what we're seeing, as you pointed out, is very similar results in all three of those studies, which is very encouraging. We're seeing very rapid improvement in executive function and memory. With most of the approaches that are looking to modify the disease by changing the position of the plaque with each respective disease, what we're seeing is those take longer because you're looking to modify the course of the disease and stop the degradation of the brain. What we're doing is we're improving static function, and that's why I think we've been seeing results in a very early amount of time, as you pointed out.

Yes, Steve, hopefully that answers your question. But, you know, what we believe we are developing with Sage 718 is a disease course modifier. And the idea here is to improve executive function, learning and memory, allowing patients living with these conditions to live more independently for a much longer period of time. Great. Thanks.

Thanks. Thank you. Our next question comes from June Lee with Truist.

Your line is now open.

Good morning. This is Austin on for June. Thanks for taking the questions. Just another question on 718. We were just wondering if you could provide a little color on why you're starting a Phase 3 safety study on 718 before Phase 2. Thank you.

Awesome. Thanks for the question. So with Sage 718, we've been pretty clear that we are running a series of phase two studies, a Huntington study and Parkinson's studies have been kicked off. The Alzheimer's study will be kicked off by the end of the year. We've designed the Huntington study in a way that will have numerical changes and kind of real world evidence on what that means, as Al talked about in the comments. And if those data are robustly positive, we'll meet with the agency on the most rapid approach to get SAGE-718 to market for Huntington's. For Parkinson's and Alzheimer's, following the Phase II studies, we'll likely run Phase III studies based upon the learnings from the Phase II.

Okay. Thank you, and congrats on the progress. Thank you.

Our next question comes from Danielle Brill with Raymond James. Your line is now open.

Hi, guys. This is Alex. I'm for Danielle. Just a quick one going back to rainforest. I know you qualitatively addressed this question the most part. I wonder if you could expand a little bit more on the depression symptom amelioration, specifically what the point delta was for HAMD at the end of the 14-day treatment period.

Yeah, Alex, will it upcoming medical meetings present Rainforest? Just as a reminder, it was, we stopped both that and Redwood with a 30 milligram dose after consulting with the agency. They're not required for regulatory filing and it enrolled very, you know, it did not fully enroll. So the stats plan can't really be looked at. What we can say today is that the profile of Xeranilone in Rainforest was consistent with data seen to date. That is improvement in depressive symptoms, anxiety, and as the purpose of the study, trends to improve sleep, sleep architecture. And again, we'll report more out in upcoming medical conferences. Great. Appreciate the call. Thanks, Alex.

That concludes today's question and answer session. I'd like to turn the call back to Barry Green for closing remarks.

Thanks, Operator, and thank you all for joining us this morning to review our second quarter progress. As we work to advance clinical and preclinical programs across our franchises, move Zorano and closer to launch commercialization if approved, and reinvest our learnings and efforts to develop and launch transformative brain health medicines across the organization, we're deeply committed to continuing our focused execution in the balance of 2022 and beyond. Look forward to future updates on our progress and our mission to pioneer solutions to deliver life-changing brain health medicine so every person can thrive. Thanks again, everyone. Have a great day.

This concludes today's conference call. Thank you for participating.

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