Sage Therapeutics, Inc.

Good morning. Welcome to the Sage Therapeutics third quarter 2022 financial results conference call. Currently, all participants are in a listen-only mode. This call is being webcast live on the investors and media section of Sage's website 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 would now like to introduce Helen Rubenstein, Director of Investor Relations at Sage. Please go ahead.

Good morning, and thank you for joining Sage Therapeutics' third quarter 2022 financial results conference call. Before we begin, I encourage everyone to go to the Investors and Media section of our website at sagex.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 our progress during the third quarter. We will also be joined by Chris Benecke, our Chief Business Officer, who will provide an update on our progress in preparation for the potential launch of the Rana Loan in MDV and PPD. Jim Dougherty, our Chief Development Officer, will review recent progress in development activities across our program. 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, Alan. And thank you, everyone, for joining us this morning. 2022 has been a year of focused execution at stage, and we're extremely pleased with all the progress we've made across our three brain health franchises. Our vision is clear. We want to fearlessly lead the way to create a world with better brain health. I believe we're well on our way to accelerating our leadership in brain health and reaching our goal to become a top tier pharmaceutical company. As we reflect on our accomplishments, including reported positive data from multiple clinical studies and initiating trials across our pipeline, we remain confident in our ability to execute for the remainder of this year, and we believe that we have the team to successfully advance our programs across brain health disorders for years to come. All of us at Sage are driven by a tremendous sense of urgency to create novel medicines for people who currently lack adequate treatment options and we're focused on addressing what matters most to patients. To that end, we've made great progress in building our organization this year to support the exciting milestones we have ahead. With that, I'll review our recent progress, starting with our depression franchise, led by Zoran Alun. The national dialogue is finally shifting to focus on a better approach to support the millions of people who are living with depression. We know that depression is complex and that failing to address it can negatively impact people's ability to maintain relationships, be productive at work, and engage in activities they enjoy. As we said for years, and a recently published just last month in the Journal of Clinical Psychiatry further supports, depression is associated with an increased incidence of dementia, Alzheimer's, cardiovascular disease, metabolic syndrome, diabetes, obesity, and certain autoimmune diseases. It doesn't have to be this way. we have a clear opportunity to help people living with depression and are encouraged by our progress. To that end, we continue to move forward on the rolling NDA submission of Zoranilone for major depressive disorder or MDD and postpartum depression or PPD, which is on track to be completed in December of this year. If the FDA grants priority review of our NDA, our PDUFA date would likely be in the third quarter of 2023. If we achieve those milestones, and Zoranilone is approved for the treatment of MGD and PPD without extension of the FDA review period, we expect a potential launch near the end of 2023, following an anticipated three-month DEA schedule review. We will be ready. Based on the totality of data generated across the Zoranilone development program, we believe that Zoranilone has the potential to be a differentiated treatment option for people suffering from MGD and PPD. As we prepare for a potential launch, We and our collaborators at Biogen are thinking big while taking a staged, data-driven approach and are prepared to scale fast with success. We know that to launch successfully, we'll need to continue to deepen our engagement with key stakeholders, including healthcare providers, patients, patient advocacy groups, policymakers, and payers. Over the past year, we've presented key analysis on Xeranalone at several important medical congresses. The analysis highlights the data on rapid and durable effect and a generally well-tellied safety pro seen in clinical studies in MDD and PPD, but used either as monotherapy or adjunctotherapy. Chris will share more detail on the positive reactions we've received from the scientific community, as well as feedback from our key stakeholders that continue to be vital as we advance our commercial Lewis plans towards our analysts. Now I'll turn to our neuropsych franchise led by Sage 718, a wholly owned, first-in-class NMDA PAM. We're excited to continue progressing a robust clinical program with multiple ongoing and planned Phase II studies in Huntington's disease, Parkinson's disease, and Alzheimer's disease. Today we are excited to share the design of our planned Phase II study in Alzheimer's disease, which Jim will walk through later in the call. Impaired cognition is a significant morbidity in the indications we're studying with SAGE-718 and can negatively impact people's ability to live life independently. We're committed to advancing the SAGE-718 program with the goal of further demonstrating its therapeutic potential and novel approach. I'd also like to highlight key corporate updates included in this morning's press release. First, I'm delighted to welcome Dr. Laura Galt to SAGE as Chief Medical Officer. In her new role, Laura will be a strategic member of the SAGE leadership team focused on advancing SAGE's current and emerging product pipeline through all stages of development. Laura brings more than 15 years of experience as your strategic global cross-functional leader with an established track record of neuroscience-directed development and designing innovative clinical trials from first-in-human through post-marketing trials. Laura complements a very experienced leadership team that is well prepared to lead Sage for years to come. Additionally, Jeff Jonas will be transitioning from his role as our Chief Innovation Officer as he embarks on a new journey at a global private equity firm. While Jeff will no longer hold a full-time role at Sage, we're pleased to have him continue as a member of our Board of Directors and other committees. Jeff has made significant contributions to Sage over the past decade, joining the company first as CEO, and then playing a critical role in our drug development strategies as Chief Innovation Officer. We extend our sincere thanks for his leadership in growing the company and helping advance our mission of creating a world with better brain health. We wish him great success in his future endeavors. I'd now like to invite Jeff to say a few words. Jeff?

Thanks, Barry. I have appreciated Sage's commitment to developing new therapeutics for neurological and psychiatric disorders. I'm convinced Sage has a unique pipeline that has the potential to contribute to innovate treatments for brain health. Barry, having worked with you over the last two years and watching how you've successfully grown the company, I'm more confident than ever in Sage's potential to advance as a top-tier biopharmaceutical company. It's a privilege to stay involved in Sage's growth as a member of the board. With that, I'll turn it back to Barry.

Thanks, Jeff. I'm confident that our accomplishments so far this year will translate into continued success as we execute our strategic goals. We remain laser focused on execution through the end of this year as we embark on what we believe will be productive journey ahead. Our goal is clear, to deliver the promise of our science and fearlessly lead the way to change the trajectory of care for millions of people living with brain health disorders. 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 Xeranilone. Chris? Thanks, Barry. I'm pleased to update you this morning on the significant progress we've made in preparing for the potential launch of Xeranilone. As Barry mentioned, we expect to complete our rolling NDA submission for MDD and PPD in December. With this important milestone on the horizon, SAGE and our collaborator Biogen are focused on preparing for the potential launch of Xeranilone with the goal of transforming the way depression is treated. There's a clear need for a differentiated approach to treating depression. The treatments currently available often fail to adequately address the unmet needs of people with MDD and PPD in a timely fashion, resulting in a countless number of people lost to the trial and error approach to treatment before their symptoms resolve. From the perspective of people living with depression, weeks matter, days matter, And the moments missed matter. Patients strongly desire rapid and lasting resolution of their symptoms without the stigmatizing side effects that can be associated with many current antidepressants. We believe Zoranilone, if approved, has the potential to enable healthcare providers to treat episodes of depression in people with MDD and PPD with the goal of improving symptoms and helping people rapidly return to a state of well-being. As we look ahead, we believe our ability to launch Zoranilone successfully is predicated upon four key points. First, executing on areas where we believe Zoranilone will be most impactful at launch with complete focus. Our market research and KOL engagements in the course of scientific exchange have pointed to clear potential initial use cases for Zoranilone. We believe there's an important opportunity to use this novel therapy as an add-on or switch for patients with MDD and PPD when another therapy isn't meeting expectations. Zoranilone may provide a versatile treatment option that could potentially be used early in a patient's journey. Additionally, based on our clinical trial data, we believe Zoranilone has potential in areas in MDD where management has historically been complex, such as in MDD patients with elevated anxiety and or comorbid insomnia. In our research, HCPs point to the rapid onset of action and tolerability profile observed in our clinical trials of Zoranilone as key attributes that they believe may enable them to quickly and confidently determine whether Zoranilone is working for their patients. If Zoranilone is approved, we intend to narrow in on these use cases early in the launch as we pursue a focused strategy. Second, maintaining high engagement with physicians by disseminating our clinical data through scientific exchange. Throughout the past year, we've presented key analyses at several important medical congresses, highlighting the rapid onset and durable effect of Zoranilone in MDD and PPD seen in our clinical trials. The feedback to these presentations has been positive. As we've engaged in discussions about the unmet need in MDD, physicians have highlighted that the potential to achieve both a rapid and durable effect matters deeply to them and remains critical to their patients. They also are increasingly recognizing the episodic nature of depression and that MDD could potentially be treated episodically with treatment-free periods. I'm inspired and motivated by discussions we've had with the medical community on the unmet need in MDD and the feedback we've received from them on the Zoranolone clinical data that's been presented. It reinforces our belief in the potential of Zoranolone in the treatment of MDD and PPD. Third, advancing payer discussions around innovative tools designed to help enable broad access to Zoranolone in MDD and PPD, such as proactive value-based agreements. In our early engagements, payers have been receptive to the potential utilization of Zoranolone, given the attributes seen in our clinical trials. They note that based on the data generated to date, Zoranilone may offer a treatment option that aligns with their objectives of better managing MDD and PPD. Further, payers have expressed interest in collaborating with Sage and Biogen on addressing access and reimbursement hurdles through innovative contracting. Value-based agreements are an example of an innovative contracting approach we're exploring. Our plan is to work with payers with the goal of enabling people with MDD and PPD who desperately need new treatment options to be able to access Zoranilone quickly and affordably. To truly be transformative, Zorinola must be accessible. And finally, executing our launch plan with a goal of reaching stakeholders across multiple channels. We plan to employ an omnichannel approach that integrates personal and digital channels to maximize stakeholder reach. To reach these stakeholders, we believe we will need to think big, take a staged, data-driven approach, and scale quickly with success. Looking forward to 2023, we are strategically building toward a potential launch. We've made key hires in supply chain, technical operations, medical affairs, marketing, and sales leadership roles over the last quarter as we work to ensure that we are ready if Zorin alone is approved. These individuals increase the depth and breadth of functional expertise with successful track records of commercializing novel therapies and significant partnership experience. As we continue to advance our launch preparations, we look forward to sharing more detail on our plans to commercialize the Randalon, if our regulatory efforts are successful. With that, I'll turn the call over to Jim for a more detailed discussion of our portfolio progress and current clinical expectations. Jim? Thanks, Chris, and good morning, everyone. 2022 has marked an important year of development across our three franchises, and the team has made tremendous progress across the board. From advancing on our rolling NDA submission for xeramilone to delivering multiple positive data readouts and successfully presenting new analyses at key scientific congresses, we're proud of where we are today and look forward to continuing to execute on the pipeline moving forward. What I find even more rewarding is the feedback we've received from the scientific community, as you heard Chris walk through earlier. Having been part of 10 years of growth at SAGE and reflecting on all that we've achieved to date It is extremely rewarding to see the scientific community take note of our progress and continue execution. Now, let me provide an update on our three brain health franchises, starting with our depression franchise. We recently shared new analyses and additional data from the Zoran Loon Clinical Development Program at the 2022 Psych Congress and the 35th European College of Neuropsychopharmacology, or ECMP, Congress. These presentations included data from the SHORELINE study and health economic and outcomes research, as well as the presentation of data from the SKYLARC study. The analyses and data presented continue to build on the positive data we've shared earlier in the year. I want to highlight a few of the key themes that support the potential for zuraniline. First, the analyses highlight the rapidity of onset of zuraniline seen in patients with both MDD and PPD in our clinical trials. In particular, results from the waterfall study showed a treatment effect compared to placebo as early as day three in Zoranilone 50 milligrams. Additionally, a post hoc analysis of MDD patients from the study suggests the improvements with Zoranilone 50 milligrams compared to placebo were clinically meaningful. Further, in the Skylark study, patients with PPD treated with Zoranilone 50 milligrams experienced rapid clinically meaningful and statistically significant improvements in depressive symptoms as early as day three that were sustained through day 45. In both studies, the results were clinically meaningful across the early time periods, further reinforcing our belief in the rapid-acting nature of Zoranilin in patients with both MDD and PPD. Second, the analyses speak to the effectiveness and durability seen in our clinical trials in patients who are on Zoranilin. Specifically, the Shoreline study demonstrated that among patients with MDD who responded to the initial two-week treatment with seranolone, 80% received one or two 14-day treatment courses during their time in the study where patients had the opportunity to be followed up for a year. Median time to first retreatment for those who responded to the initial two-week treatment was 249 days in the 50-milligram cohort. As it relates to the potential durability of zurandolin for patients with PPD, data from the Skylark study demonstrated positive results across all primary and secondary endpoints, including statistically significant responses across all time periods measured, which further highlights durability. It's important to note that the durability of effect in our clinical trials was seen broadly across MDD patients, both with and without anxiety symptoms of baseline. As we know from the literature and studies like STAR-D, MDD patients with elevated anxiety as one of the symptoms of their depression are among those with the poorest outcomes. Based on the data seen in our studies to date, we believe Zoranilone may be well suited to address a clear unmet need for a broad range of people with MDD. Third, the data from our clinical trial suggests potential flexibility of Zoranilone as a monotherapy or as add-on therapy in the treatment of MDD. Additional analysis from the landscape program showed that whether used as a monotherapy or as an add-on therapy with existing ADTs, the ranolin performs similarly well. These data provide further insight on the flexibility clinicians may have to meet the needs of their patients with MDD with the ranolin, if approved. Lastly, the ranolin was generally well-tolerated, with safety profiles seen in the Skylark and Shoreline studies consistent with prior clinical studies. The most common adverse events seen in the landscape and nest programs were headache, somnolence, dizziness, and sedation, with no signals of weight gain or sexual dysfunction that often lead to discontinuation of current treatment options. Overall, these analyses and the data observed consistently across the Zoranolone Clinical Development Program reinforced the potential opportunity for Zoranolone as a novel treatment for both MDD and PPD. Now I'd like to turn to our neuropsychiatry franchise led by SAGE 718, our lead NMDA receptor PAM. SAGE 718 is being developed for certain disorders where impairment of cognition is one of the main drivers of disability. This is a wholly owned program that was granted fast track designation by the FDA as a potential treatment for cognitive impairment in Huntington's disease or HD. We are also investigating SAGE 718 in people with mild cognitive impairment due to Parkinson's disease PD, and people with mild cognitive impairment and mild dementia due to Alzheimer's disease, or AD. To date, we have seen encouraging data across multiple open-label studies, which have demonstrated consistent improvement in measures of cognitive and executive function. We are progressing enrollment in the Phase II Dimension Study and the Phase II Surveyor Study in people with HD cognitive impairment. We recently reported additional results from the Paradigm Part B study at ECMP showing that improvements in executive function could be sustained through 28 days of dosing and to day 42 follow-up, supporting the possibility of durable response with extended treatment. Stage 718 was generally well tolerated with extended 28-day exposure, and the observed adverse events were consistent with the safety profile of stage 718 reported to date. We are also progressing enrollment in the precedent study, a phase two placebo controlled study of stage 718 in people with mild cognitive impairment due to PD. Additionally, we are on track to initiate a placebo controlled phase two study with phase 718 in patients with AD cognitive impairment, which we are calling the light wave study that is planned to begin in late 2022. Today, we're excited to provide more detail around the study design for this trial, which can also be found on slide 34 of the corporate deck on our website. This phase two randomized double-blind placebo-controlled study is intended to evaluate the safety, tolerability, and effects on cognitive performance of stage 718 in patients with mild cognitive impairment or mild dementia due to AD. The study design includes a 12-week treatment period followed by a four-week follow-up period. The primary endpoint? is the change from baseline at day 84 in the coding test from the Wechsler Adult Intelligence Scale . This is one of the most widely used measures of cognitive performance for adults and older adolescents. In this trial, we're looking for changes in cognitive performance that will be apparent to both patients and their families that can provide meaningful effects to their lives. In addition, we plan to measure a variety of additional endpoints to assess the effects of stage 718 on cognitive performance and functioning. including CGIC, MOCA, TANTAB, and the Amsterdam Instrumental Activity of Daily Living Questionnaire. Looking ahead, we plan to share program updates at key upcoming scientific congresses and further the exchange of ideas, which we believe has never been more important in the quest to help brain health patients get better sooner. Now, I'll move to our neurology franchise, led by Sage324, a next-generation positive allosteric modulator of GABA-A receptors. We believe that Sage 324 holds significant potential in the treatment of neurological conditions like essential tremor, or ET, a disease that has limited treatment options and no new innovation for over 50 years. We announced in the last quarter's earnings call that our Phase 2 long-term open label study with Sage 324 and ET was initiated. With regard to our Phase 2b Kinetic 2 dose ranging study evaluating Sage 324 and ET, We are updating our guidance on completion of enrollment. We now expect to fully enroll the study in late 2023. The change in guidance is a result of a number of factors that have had a particular impact on our ET study. We look forward to sharing more updates on these studies in the coming course. To close, I continue to be amazed by the team that has moved the dynamic pipeline forward. We have an exciting path ahead of us, and we remain laser focused on execution across our three franchises. I look forward to advancing and accelerating our efforts to develop brain health medicines to help patients get better sooner. Now I'll turn the call over to Kimmy for a review of our financials. Kimmy?

Thanks, Jim. Before I dive in, I'd like to acknowledge the team's effort and resilience in driving the business forward, especially in the face of a challenging market environment. The work our team has accomplished this year is a direct reflection of dedication we have for patients and the urgency to find new therapies for those in need. Now turning to our financial results, details on the third quarter are disclosed in our press release issued this morning. I'll take a moment to provide some context and highlight a few key takeaways. At the end of the third quarter, we maintained a strong cash position, which we believe will allow us to support the launch of Zorana Loans, if approved, continue to build a strong team, and provide flexibility to strategically invest across our pipelines. While we expect our cash balance to enable us to execute from a position of strength, we're closely monitoring the external environment and maintaining a disciplined approach to investing. Our net loss for the third quarter of 2022 was $137.3 million, and we ended the quarter with cash, cash equivalents, and marketable securities of $1.4 billion. Turning to operating expenses, R&D expenses were $81.6 million in the third quarter of 2022, primarily driven by the ongoing investments in our wholly owned and partner programs, including Stage 324 and Stage 718. Looking forward, we expect R&D spend to increase in the coming quarters as we advance the six planned and ongoing Phase II studies with Stage 718 and Stage 324 mentioned earlier. SG&A expenses increased to $61.5 million in the third quarter of 2022, primarily due to hiring employees to support ongoing activities in anticipation of potential launch. As you heard from Barry and Chris, we're continuing preparations to support the potential launch of Xuranilon. To this end, we expect that SG&A spend will increase as we continue commercialization preparations. As a reminder, as part of our collaboration with Biogen, We're jointly developing Zorana Loan in Stage 324 with a 50-50 cost sharing in the United States. We're thinking big about the Zorana Loan opportunity, though we remain mindful of the capital allocation prior to launch. We plan to invest appropriately and scale with success. During the third quarter, we recorded $18.3 million in reimbursement from Biogen related to our collaboration and license agreement. Looking ahead to the remainder 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 ongoing collaborations and potential revenue will support operations into 2025. While the market environment remains uncertain, we are fortunate to be in a strong financial position and the flexibility to invest strategically. As always, we're monitoring developments across the macro and regulatory environments, especially as it relates to brain health, and are preparing appropriately as new information comes to light. As we embark on a transformational period for the company, I'm confident that our solid balance sheet will enable us to execute from a position of strength. We remain focused on prioritizing disciplined investments across our pipeline to ensure that our plans are scalable, flexible, and most importantly, patient-centric as we pursue our vision of fearlessly leading the way to create a world with better brain health. 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?

Certainly. As a reminder, to ask a question, you will need to press star 11 on your telephone. Please stand by while we compile the Q&A roster. One moment. And our first question will come from Yasmine Rahimi of Piper Sandler. Your line is open.

Good morning, team, and congrats on all the updates. A quick question for you as you're getting ready to complete the NDA and preparing for the adcom. Can you just maybe provide us some color around what are some of the topics that could arise as you're doing the mock adcom reviews? Anything that could just sort of prepare us into that? And I know we have a little bit to go before that comes up, but greatly appreciate any color that you could share with us this morning. And I'll jump in the queue for follow up questions.

Yeah, thank you for the question. And good morning to you. Appreciate the congrats on the strong quarter we've had. We're well on our way to file the NDA. And as we've narrowed the guidance, we're prepared to file the NDA in December. So second half of the year as guided. Just to be clear, whether or not we have an ADCOM is up to the discretion of the FDA. If we have an ADCOM, and I'll ask Jim to comment on what it might look like, we'll be well prepared to listen to patient testimonies and really showcase the totality of the Xeranolin data, so we'll be excited for that. If the FDA decides not to have an ADCOM as a signal of an earlier approval, we'll certainly be ready for that as well. Jim, you want to talk about if there is an ADCOM, what kind of questions we'd anticipate and be prepared for it? Sure, very happy to. And as Barry said, since we don't know whether we're going to have an adcom or not for the program, the team internally is preparing as if we will. So we are thinking about this question. Not surprisingly, when you think about what the agency is trying to achieve with an adcom, they're really trying to understand efficacy and safety tolerability for an agent, as well as, I think, in cases where there's a novel approach, trying to understand pieces of that novel approach. So You know, in all those areas, we're well prepared. The landscape and nest program was designed to provide an interlocking set of data to describe the totality of data, and that includes the totality of the efficacy data, whether the drug is used as monotherapy or in combination with standard antidepressants with patients who have anxiety or not. And in the tolerability area, What we were seeing is a very consistent picture across all of our clinical trials, a very novel and benign safety profile relative to some other agents that are available. And then finally, with the novelty piece with the GABA mechanism of action, I think that's something that we've spent a lot of time elucidating. And for all these, we would look forward to the ability to really tell the whole story of Saran Lin in one day.

Thank you, Tim.

One moment. And our next question will come from Ritu Arao of Cohen. Ritu, your line is open.

Good morning, guys. Thanks for taking the question. Mine is going to be focused on commercial strategy. Forgive me, it's got two parts. One, I have to ask about Biogen and where they are currently contributing to setting the strategy. And the second part is basically, you talked about access, but as you think about psychiatrists versus potentially PCPs prescribing add-on or switch, do you see that as sort of add-on and switch in the PCP setting versus the specialist setting, especially given all of the constraints, certainly in the U.S., for patients trying to access psychiatrists at all. Thanks.

Hey, Ritu. Good morning, and thank you for the question. So, two parts, Biogen and then Access. So, on the Biogen piece, we've been well-partnered with Biogen from the beginning of the collaboration. We've got strong relationships all over the organization and working very well together. on the regulatory front, tech upfront, supply chain, as well as commercialization and are well aligned on our commercialization strategy, which Chris spoke on the call. I'll ask Chris to talk about access, but we've seen on the payer front lots of receptivity to our leaning in with proactive value-based agreements and an appreciation that There's over 20 million people with depression, 7 million of whom every year are looking for new treatment options. So the unmet need remains very, very high. Chris, do you want to talk about psychiatry, primary care, and where we see patients gaining access to their own? Sure, Darren. Thank you. So this past weekend, I spent time at the Neuroscience Education Institute out in Colorado Springs, Colorado, in large part psychiatry. And let me say that the tenor of that conversation was that there's excitement around saran along and that there's a belief in and amongst them that they're pleased to find that they've been looking for medications that work rapidly. They've been looking for medications that work and sustain effect over time. Those that can be delivered through a short course and come without the stigmatizing side effects of other antidepressants. And they're excited about that because they know that they have patients, many of whom are still early in the treatment journey, who would benefit from that treatment intervention, whether that is a patient that needs monotherapy or a patient that needs switched to a different medication because they're not achieving the type of efficacy that they're looking for. We've gotten that same sentiment from primary care physicians who we've spoken to as well. As you know, oftentimes many patients go to a primary care physician first, and they're looking for that kind of treatment intervention, something that works rapidly and lasts over time, something that doesn't come with stigmatizing side effects, that they don't need to be on in perpetuity. So in some total, both primary care physicians and psychiatrists are looking for those kinds of interventions. And we believe that we should set the first and foremost in psychiatry where we choose to focus, but then over the course of time as we expand into primary care and we ultimately reach primary care physicians with omni-channel efforts, they'll use it in that same population as well. Thanks, Chris. Thanks, Ritu.

Thanks. One moment. And our next question will come from Salveen Richter of Goldman Sachs. One moment.

Good morning. Thanks for my question. You've spoken about potentially using a value-based approach with the payers here for the MDD PPD franchise. Just curious about receptivity to that in your initial discussions.

Yeah, Sylvia, I'll start and then I'll kick it over to Chris. So as you're well aware, proactive value-based agreements have been used by many kind of in the orphan space. We believe we can apply the same principles to a large market like MDD and PPD. As I mentioned earlier, there's millions of people living with depression and rapid access without significant prior off or step edits are important. And we think that by value-based agreements or sharing risk with payers, it'll lead to more rapid access. I'll start, and Chris will dive in. I can tell you that the receptivity to appreciating depression as a significant unmet need is certainly there, and payers are very open to understanding how we might share risk with them in a DBA approach. Chris, want to add? Thanks, Barry. So we've spoken to the vast majority of payers already at this stage, and Barry, I think you hit it. Payers are highly engaged, and they're receptive to the conversation, particularly at this stage of our launch readiness efforts. The reason why or the reasons why they're receptive and highly engaged from my point of view is that first, they recognize that there's still this profound unmet need in the treatment of patients living with both MDD and PPD. That's not just as payers, but that's just people too. Like many of us, payers have loved ones that are suffering from being unable to achieve a diagnosis and to ultimately get the kind of treatment that they need to continue to go on living their lives. I think the second point that I noticed is that they're incredibly excited about the data that we've shared, data that shows that patients can be treated rapidly, that there's sustained effects over time, that these therapies don't come with stigmatizing side effects, and that they can be delivered over a short course. And patients, whether they have elevated anxiety or difficulty with insomnia, they can be treated with this medication as well. So this is taking a very complex patient population for repair and streamlining or making the treatment of the much simpler than it's been before.

Thank you. One moment. And our next question will come from Paul Matisse of Stiefel. Your line is open, Paul.

Great. Thanks so much. Just one question for me. As you're wrapping up the Xeranolone NDA filing, I wanted to specifically ask about how you're framing the shoreline study from a regulatory perspective? I know we've talked about this before, but specifically, are you framing the shoreline study as a maintenance trial and offering maintenance of benefit, or are you framing this as a long-term safety study that offers some information on efficacy, but the reality is you may need to do a maintenance trial post-marketing? Thanks so much.

Yeah, Paul, thanks for the question. Again, we're excited to be filing the NDA in December. We're in good shape. All the modules are in QA mode. I'll ask Jim to comment a bit on Shoreline. You may remember that there was a study at the beginning of the landscape where we were treating patients at a regular basis. In meeting with the FDA, we agreed that the Shoreline study could serve as a understanding of long-term safety and retreatment needs. And we're filing the Shoreline study along with the NDA as part of the safety database. It's also informative to understand when we treat somebody with a two-week course of treatment, the durability of that effect. You heard on the call that for those that responded to the first treatment of Shoreline, a majority required only one or two two-week courses in the course of a year, and the median time to retreat was 249 days, really speaking to the durability of effect. Jim, you want to talk more about Shoreline and how we'll use it in the FDA discussion? Yeah, absolutely, Barry, and hi, Paul. As you've heard me talk about a number of times, each of the studies in the seranolone and nest programs have their own intended purpose, and they all sort of lock together. Really, as Barry has mentioned, Shoreline has served multiple roles in the program. I think first and foremost, it provides us safety data from well over 1,000 patients in their seranolone. But perhaps even more importantly, it really provides real-world-type evidence for how Zoranum is likely to be delivered. And as you heard me say in the prepared remarks, what we find remarkable from the shoreline data today, one of the things we find remarkable, is that in the 50-milligram cohort, you're seeing a median retreatment time of 249 days. That's over eight months. Excited about the data set to date. When we're presenting this in our regulatory information, we will provide all of that context. And really, that's going to be part of the dialogue with the FDA, is looking at the multiple ways that the shoreline data amplifies the Zorin Loan story.

All right, Aubrey, do we get to the next question?

Certainly. Our next question comes from Laura Chico of Wedbush. Your line is open.

Good morning. Thanks for taking the question. I guess I'll ask one on stage 324 and the kinetic study. It looks like there is a bit of an issue on enrollment. I'm just wondering if you could offer perhaps any additional color here in terms of maybe the major issues that have been constraining recruitment and kind of steps that are being taken to address that. Thanks very much.

Hey, Laura, thanks for the question. Good morning. Yeah, so CH324, which is a gabapam meant for chronic treatment, initially being studied right now in essential tremor. The Kinetic II study is a dose-ranging study over a three-month period of time. And yes, we've updated the guidance that we'll fully enroll the trial by the end of late next year. Jim, you want to talk about sort of how we thought about it and what's going on there? Of course, Dave. Good morning, Laura. As you know, we take a pretty robust approach to the conduct of our clinical trials, and that really includes constant assessment of ongoing studies like Kinetics 2. And I would say to summarize our analysis to date, we've seen several challenges to enrollment, and those would include, first, patient access. We've seen a slower pace of patients entering the trial than we had originally expected, in part due to some specific entry criteria that are part of the protocol that we're addressing. I would say competition. There are multiple essential terminal trials that are currently underway from different sponsors, all targeting a similar patient profile. And finally, site delivery. There are staffing challenges at sites and CROs coming out of the pandemic, and available sites are loaded with active studies. So we do think it's a combination of a number of factors that is leading to the re-guidance for the kinetics use studies. Yeah, thanks, Jim. And just to be clear, Laura, we're still very excited about 324 and essential tremor and potentially other indications. And as you're well aware, there hasn't been innovation in essential tremor for over 50 years. So the fact that multiple companies are working and studying essential tremor is actually great for that patient population.

Thank you. One moment. Our next question comes from Jay Olson of Oppenheimer. Your line is open.

Oh, hey, thanks for the update, and thanks for taking the question. We're curious about stage 718 and the dimension study. Can you talk about the pace of enrollment and when we should expect to see data from that study, and then what are the incremental learnings that you hope to capture from the surveyor study? Thank you.

Yeah, I'm going to kick it over to Jim in a moment, but thanks for asking about SAGE 718. We're excited to be developing SAGE 718, our wholly owned NMDA TAM in neurodegenerative diseases. As you mentioned, starting in Huntington's, but also focused on Parkinson's and Alzheimer's. The way we've thought about the Huntington's clinical studies is very robustly. We've got multiple studies running. And we've suggested that if the data are robust and positive, we won't be shy in working with regulators to try to push that forward. And we're learning in each and every study. Jim, you want to talk more about the Huntington studies and how we set them up? Absolutely. Happy to. Jay, as you know, we've talked about it. We've been working in the Huntington space for a number of years now. And one of the things we've been doing along the way is building our communication with the Huntington community, I think. seeing that with the dimension and survey studies in the sense that it really is impacting getting patients into the study. So we're very pleased to see that. As far as the strategy, the study, as you know, is about a three-month in duration study, placebo-controlled format, really building on the work that we've already done in the open-label format. So what we're trying to do with dimension is to confirm in a placebo-controlled study the signals that we've seen with stage 718 to date. The Surveyor Study plays a couple of different roles in the program. It certainly will allow us to look in another study at the role of 718 relative to a placebo group, looking at the primary endpoint, again, being HD-CAB, and so improvement of cognitive performance. But in the Surveyor Study, we're also looking at the impact of the changes to cognitive function real-world function in addition we will have a control group that is not treated just allowing us to compare relative to the decline that's occurring hunting disease over the duration of the study so we do see that these studies provide complementary information and we continue to enroll as we've done in the past what we'll do is as we get a little bit farther along in our enrollment we'll give projections on when we think that the studies are going to complete.

Kimmy, just one more point on 718. I think this is a really good example of our expand and accelerate strategy. When we saw good data, when we saw a good profile, we made the investments. And we'll continue to do that in a similar vein for the rest of the pipeline. So we look forward to updating you more on, say, 718. Great.

That's super helpful. Thank you. Thanks, Jay.

One moment. Our next question will come from Ami Fadiyah of Needham Company. Your line is open.

Hi, good morning, everyone. Thanks for taking the question and congrats on all the progress. I have a follow-up question on Sage 217. And as you mentioned, get ready to complete your filing. Can you talk about how you're thinking about pricing the product? I know it's a little too early to actually, you know, announce pricing specifically, but can you talk about some of the sort of activities ongoing with respect to identifying the right price and some of the feedback you might have received from payers around the price range? Thanks.

Thanks, Tommy, and I appreciate the congratulations on the quarter. We're very excited by that as well. Chris, you want to talk about how we're thinking about access for Zorano? Yeah, for sure. Thank you. So while pricing is an important part of the value and access strategy, as you know, it's not the only component that we're focused on at this point. We want to make sure that with respect to the access strategy, we're doing everything that we can to enable physicians We want to prescribe the medication at launch to be able to get the medication with minimal friction. And for patients who want to experience the benefits of Zoranolone if approved at launch, that they're able to access that medication rapidly and also affordably. So those are really critical. So with respect to how we're thinking about the pricing, we're going to price it in line with the value that we believe that Zoranolone brings to the market based upon the differentiated value proposition that I noted earlier that it actually offers. I think you hit it earlier. We want to make sure that we stay out of the high-cost specialty tier associated with medications. We know that that specialty tier often comes with prior authorizations and step edits that can make it difficult for a physician to prescribe the product and the patient to get it. In order to do that, we're going to lean in with value-based agreements that are proactive. And we've already initiated conversations with pairs in and around how we're thinking about value and access and, in particular, VBAs. And as I said earlier, there's a high degree of engagement and receptivity to that. With respect to how we think about the value and access strategy and totality, we want to make sure that we are as innovative with our value and access strategy as we are with our discovery and development of the strategies we intend to bring to market.

Thank you.

Thanks, Ami.

One moment. And our next question will come from Samant Kulkarni of Canaccord Genuity. Your line's open.

Good morning. I'll start with a quick good luck to Jeff as you walk into a different type of forest this time involving private equity. My question is for Chris. In your early market research on Zoranolone, you mentioned that some have started appreciating the episodic nature or component of MDD. Do you have any quantitative details you can share about percentage of physicians or payers that may already be on board with this concept? And if not on board, what's the main source of resistance? Is it simply tradition or are there more factors perhaps related to physician liability, for example, and docs wanting patients to be on a baseline level of care if the seranolone effect wears off.

Thanks, Saman. And Jeff, Saman, we appreciate your support of him moving into the private equity. I'm sure he'll call with any helping needs. You know, look, I think what we're dealing with is we're dealing with historic context in terms of how depression is thought about and treated and the chronicity of treatments. What I can tell you, and Chris will dive in with some more specifics, is that the list here has gotten much less. The fact is that the median time a patient's on a new prescription is seven weeks, and most patients cycle through two or more drugs in the course of the year. So this belief that a patient's diagnosed is on chronic treatment forever is not supported by the data. And given the totalities around data and the opportunity to treat someone for two weeks is resonating with a number of physicians. I think you've heard quotes from many physicians that being able to take a pill for two weeks and then not being reminded for the rest of the year that they have depression is actually a major benefit. So the lips has gotten much, much less the totality of data and there's tremendous receptivity to a short rapid acting and short course treatment. Chris, you want to add? Yeah. Thanks, Barry. Well, I can't answer the number directly at this point. What I can say, and let me provide some color on Barry's comments. Again, at the NEI conference that I was just at over this past weekend, there's a lot of conversation going on right now about the ability to treat patients episodically and to return them back to a state of well-being. That's really important. And that is a shifting priority that I've seen occur over the last 12 months is as we continue to put data out into the market and through scientific exchange, have a number of those meaningful conversations. What clinicians now grasp is that there is an urgency to treat patients, to diagnose and treat patients, because they understand that clinical outcomes are at hand by earlier diagnosis and earlier treatment that we can go into at a later time. But that is a priority moving forward. I think sometimes what we take for granted, you know, we have this conversation around that we're living in and amongst a brain health pandemic or a mental health crisis. These clinicians are living squarely in the midst of this, and you don't change a crisis by doing the same thing that you've always done again and again. You look for different ways to treat patients, and now they have novel therapies coming to market that allow them to do that, which is a very important one. Thanks. Thanks, Saman.

One moment. Our next question. We'll come from Yoon Lee of Truist. Yoon, your line is open.

All right. Thanks for taking our questions. Correct me if I'm wrong, but our understanding is that human abuse studies require that you test three times the proposed dose, which in the case of Zoran alone would be 150 milligrams. Have you tested that dose in your abuse liability study? And if so, what sort of liability score did you get? Thank you.

Yeah, let me say that we've done the human abuse potential studies. They're well done. They'll be part of the filing, and we've done it in alignment with the agency. Jim, you want to share any more color? Yeah, absolutely, Barry. As Barry said, we have done the studies looking at likability. We've measured relative to benzodiazepines, and what we've seen is there are multiple doses for Zoranilone. The likability is at Therapeutically relevant dose is not different than placebo and at super therapeutic doses multiples above the therapeutic dose we're seeing a likability that is comparable to what you see with a therapeutic dose of benzodiazepine. Yeah, I'll just add that when we look at human clinical trials such as Shoreline, the largest natural study ever run in depression, when we pure these data, The majority of patients that responded required only a two-week course of treatment, and 80% required one or two two-week course of treatment. At the exit of all those trials, there are likability-like questions that are asked, and you're not seeing anything in Shoreline that suggests that patients are desiring to get back on drugs, as you see with other antidepressants.

Thank you. One moment. Our next question will come from Vikram Perhet of Morgan Stanley. One moment. Your line is open.

You've got Will on for Vikram. Congrats on the quarter, guys, and thanks for taking our question. Just one follow-up on 718. For the data that's expected throughout the rest of this year, can you provide just a little bit more color on what we could expect to see and what you might be presenting? Thanks.

Hey, well, thanks, and welcome on the call. Let me turn it over to Jim. Yeah, absolutely. So 718 is in a phase right now of what I would call consistent execution. So the team has been working to open and conduct multiple clinical trials. So we talked earlier on the call about the Huntington study perspective and surveyor. So those studies are enrolling and moving forward. The team is also working on the Parkinson's So that study was opened a little bit later in the year, but is also enrolling. And then really the focus right now, in addition to getting those studies moving, is the work on the light wave study that we've described today. So that study in Alzheimer's disease, mild cognitive impairment, and early dementia and Alzheimer's, we're hoping to get that study, we intend to get that study started by the end of the year. Really, the team is mostly focused at the moment on those studies and getting all of those clinical trials in good shape. In addition to that, through scientific exchange, we're looking at results from the earlier open-label phase studies. So you're starting to see deeper analyses from those studies, including, as I talked about on the call earlier, the longer-duration dosing from the paradigm study, where we extended from 14-day dosing out to 28-day dosing. And really what we found encouraging about those results is you see a prolonged improvement that we've seen at the 14-day time point maintained out at least at that 28-day time point with no real change in tolerability profile. So hopefully that gives you a flavor of a large amount of work that's going on in the base of money program.

That does. Thanks.

Thanks, Will.

Thank you. And I would now like to hand the call back to Barry for closing remarks.

Thank you, LaTanya, and thanks again to everyone for joining us this morning to review our third quarter progress. I'd like to take a moment to thank everyone at SAGE for their hard work and dedication in advancing our mission of pioneering solutions to deliver life-changing brain health medicine so every person can thrive. I'm truly inspired by our exceptional people and our collaborators and their relentless commitment to patients. As we continue to make critical advancements across our brain health franchises, we're pleased to be executing from a position of strength We look forward to continuing our quest to develop and launch transformative brain health medicines for patients in need in the quarters ahead. Thanks again, everyone, and have a great day, and please get out and vote.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.