Welcome, everyone. This is the fireside chat with Sage Therapeutics. My name is Vikram Purohit. I'm one of the biotech analysts with Morgan Stanley Research. Before we get started, I just need to let you know of a disclosure. For all important disclosures, please see the Morgan Stanley website at www.morganstanley.com/researchdisclosures. If you have any questions, please reach out to your sales representative. With that, happy to have with me, Barry Greene from Sage. Barry, thanks for joining us. Yeah, Vikram. Really appreciate being here. I thank the organizers of Morgan Stanley for having us. It's great to be here in New York with you. Great. Barry, we have quite a few items to talk about, but maybe the best thing to do is to start with some opening remarks from your side on some of the key milestones and inflection points that you think Sage has kind of gone through year to date, and we can go into specifics from there. Yeah, Vikram, obviously, you know, absolutely. And just to be clear, I will also be making forward-looking statements. Exactly. You gotta look at our website, not yours, okay? Look, it's a really exciting time for us at Sage. We're really excited to launch ZURZUVAE for PPD. As we've said, we'll have ZURZUVAE available shortly after DEA scheduling, so kind of end of the year, fourth quarter, and we'll talk more about it. But we're really excited by the opportunity to help lots of women suffering from PPD, and really the opportunity to make a brand-new market that hasn't existed before in PPD. And then we have a very catalyst-rich season next year. We have SAGE-718, our wholly owned NMDA positive allosteric modulator that we're studying in cognition in neurodegenerative diseases. And we'll have all the Alzheimer's, Huntington's, and Parkinson's readouts next year. We'll try to provide a little bit more clarity on early, mid, or late, but right now, we have those reading out next year. We also have SAGE-324, our chronic GABAA PAM that we're developing for movement disorders, starting with essential tremor. The KINETIC 2 trial will also read out next year. Now, you also know that, given the CRL we received, we've-- Sage has restructured ourselves so that we're right-sized now to take advantage of ZURZUVAE launch in PPD and to create significant value from here by prosecuting the rest of our pipeline. Great. Maybe the first topic, just to address it head-on, is MDD. Have you received any feedback from the agency on their thinking, their rationale behind their decision in that indication? Yeah, what I can say is, my advice is to be thinking about ZURZUVAE and Sage as PPD only. If MDD comes back into the picture anytime in the future, that's a kind of a high-class problem to have. But we have sized ourself and spending ourselves to be PPD only. So that's our thought process. What we can say on the MDD front is, you know, we received the CRL. We're going through what it says, and we plan on meeting with the agency to talk through the rationale for the CRL and see if there's next steps after that. But right now, we're really solely focused on PPD, and I advise everybody to be PPD-focused. Got it. Okay. So in that vein, then, what are some of the key kind of pre-launch activities currently underway with, yourself and Biogen? Yeah. So we're working on the overall launch strategy and plan. Obviously, this is a scenario we worked out, so there's some good work being done. Strategically and philosophically, we're thinking that this is a really big opportunity, but we're gonna start small and be prepared to scale fast. This is the kind of launch that we want to get the capitalization behind the launch right, but not overcapitalize the launch. As we see pockets of success, we'll increase spending and people on those pockets of success. Anytime you're building a brand-new market that doesn't really exist, and PPD doesn't really exist, we think that's the right way to go. The team's working on the details. We'll launch, obviously, with a very broad digitization, omni-channel approach to reach broad audiences. The healthcare providers we're looking to are not only physicians, but nurse practitioners and PAs that are OB-GYN-related, psych-related, and some of the larger primary care offices. We are thrilled that when ZURZUVAE got approved, the media attention was dramatic and extremely positive. I think everybody saw, you know, Good Morning America every morning, CNN every night. I've got a friend of mine who I've known forever, I don't know if he knows what I do, but he called me and said, "I saw you in The Washington Post on the cover." So, it really received attention. I think that, and that media attention was not by mistake, and that media will continue to be orchestrated. So we're gonna have really good tailwinds behind us on the healthcare provider, patient advocate, media front, as well as policy. What's going on in most states in the United States right now are maternal mental health bills that really pay attention to what's been underserved before, maternal mental health. We're really happy to be part of the new solution set there. Got it. Okay. And remind us, how are the responsibilities currently split between yourself and Biogen? Yeah. In the United States, the partnership with Biogen is a 50/50 relationship, so joint decision-making. Now, exactly what people we deploy and who does what, we're still working on the details there, but it's a 50/50 partnership. Understood. Okay. And then, based on the label you received for ZURZUVAE, how do you think about the immediate addressable population within PPD? Well, you know, the dynamic in PPD right now is epidemiologically, and this is conservative thinking, but epidemiologically, one in eight live births results in a depressive episode, PPD. That's about 500,000 women in the United States. Of those 500,000 women, about half are diagnosed, and then less than half of those are treated. So about 100,000 women get treated per year with PPD. A significant number of them, unfortunately, stay in a state of being unwell, so they may be a little bit better on an SSRI in a couple of months, but they're not yet well. And the consequence of a mom not being well is not only devastating for her-... but the entire family unit, including that baby, which she's not bonding with, and that could have generational impact. So we're going after PPD. If a mom's got PPD, she deserves to be treated. Understood. Any best practices, lessons learned from the experience with ZULRESSO when you think about devising the commercial strategy for ZURZUVAE? Yeah, we obviously know a lot about PPD, and you know, the challenge with ZULRESSO is one of access to an infusion site- Mm-hmm. - and then the REMS program. So we don't have infusion sites, we have a REMS program, and access here should be pretty straightforward. We understand the OB-GYNs that are interested in PPD, even though the solution sets today are challenging. With ZURZUVAE, that really changes dramatically. We also understand the psychiatrists interested in PPD and some of the larger primary care-type offices that are interested. So we live in a world of very good information, so we know where to start. The other important part of PPD are the referral networks, which we understand and have mapped out, and some of the larger institutions that are focusing on mental health clinics or chains of clinics that are forming. So by understanding where to go and where the patient flow is, which we know, we should have a good uptake and understanding of ZURZUVAE and PPD. Understood. Okay. Now walk us through the timelines here for DEA scheduling, disclosing a price, getting product actually available to patients. How long is that all going to take, and what are some of the key steps there? Excuse me. Right. When we got the news from the FDA on August 4th, we announced a couple of hours later that ZURZUVAE would be commercially available shortly after DEA scheduling, so fourth quarter. Typically, the DEA takes all of the 90 days they're permitted to take before scheduling. We believe that ZURZUVAE will be a Schedule IV drug, which is what we've planned for, which really has an impact on the supply chain more than anything. And that, you know, kind of, commercial availability will be there by the end of the year and we'll be in full launch mode into next year. Now, it's important to understand the kind of the year-one dynamic of a make-the-market kind of launch, particularly, this one. There are a number of insurance companies that will cover ZURZUVAE right away, but we all know that there are payers out there that have policies in place that wait six months and a day before engaging the conversation. So what we're looking at in kind of the first full plus year of launch are the prescribers we're getting, the patient flow. You know, we'll have free goods and other things going on there. So what volume of prescriptions and flow-through we're getting that will really set up kind of year two and beyond of launch, which is really where the revenue kicks in. Got it. And, I know you're not disclosing a price point at this point, but in general, how should people think about price? What are some good bookends to keep in mind? You know, look, we'd say about price, which we... You know, our plan right now would be to talk about further commercialization strategy, potentially including price, toward the end of the year when the drug's commercially available, kind of at that point, not before that. And the way to think about price is, you know, really revenue optimization. It's N times price. So if the price is too much on the low side, then you're losing, you're leaving value on the table. If it's too much on the high side, then we're not going to help as many women suffering from PPD because there'll be obstacles in the way. We, as I said, we've got tremendous tailwinds behind us on the healthcare provider front, patient advocacy, the legislative front, the media front. We want to keep those positive tailwinds going. The other thing we've said is, previously, we highlighted that when it was MDD and PPD, that $10,000 was the ceiling, the specialty tier. That—I would not consider that on the table right now, but without giving any just more specifics. Okay. All right. Fair enough. Then I guess when you think about duration, I think that's another topic of interest for people. Annual courses per therapy, what kind of commentary you can provide there on how people should think about an appropriate range? Well, our assumption is one 14-day pack. Okay. What our data suggests from the PPD trials is that moms respond quickly, day three. You know, day 15, it's clinically relevant, statistically significant, and that beneficial effect lasted all the way out to day 45, clinically meaningful and separated from placebo. Now, we have anecdotes, and, you know, lots of anecdotes don't add up to data, so take it for what it's worth. But we have anecdotes from our trials and reaching back out to moms that for as far as we followed up, excuse me, moms stayed well. Okay. We expect one pack a year. Okay, understood. Next question is a little bit on the nose, but I think it's a topic of interest for people: Biogen's level of commitment in PPD and commitment to this partnership. Any commentary you can provide there on how that interaction's been since the approval came through for PPD, but not for MDD? Yeah, so what, what I can say is that, two hours after getting the news, we issued a joint press release committing to make ZURZUVAE available for PPD, shortly after DEA scheduling. We're still committed to that. That hasn't changed. We know we're working with them on, you know, any FDA action on MDD, so that we're working on together. And the commitment level hasn't changed. Our teams are getting together, they're working. We're strategically aligned on the think big, start small, scale fast, and the teams are really working out the details of who goes where, who does what, and what all that looks like. We'll have broad omni-channel available. We'll have personal promotion, we'll other non-personal promotion, and there'll be other creative things like influencers and, you know, other media that will continue to raise awareness of ZURZUVAE and raise awareness about PPD being such an unmet need. Understood. And, like, from your survey of this patient population and from your experience with it, through the commercialization of ZULRESSO, do you think there's going to need to be a very active push to activate patients? Or do you think there's, like, a very ready market right now and a ready patient base right now just waiting for therapy to be available? ... Sort of yes and yes. So no, no drug sells itself. It always requires a constant awareness. It requires help with navigating potential reimbursement pathways. As I said, you know, at launch, by definition, there'll be a number of payers who are just waiting to cover the drug. So there's always this interesting dynamic. You need people out there. Again, let's go back to the media. So any-- You have to not have been paying attention to not see ZURZUVAE for PPD. It was all over all the major outlets, all the newspapers. That will continue. Just yesterday or the day before, there was a People magazine article on one woman who got ZURZUVAE, and she told her story to People magazine. What, what... The big dynamic that I've seen since Sage launched ZULRESSO is the stigmatized dynamic of PPD dropping drastically. And as the next generation of women have babies, they're already talking about their issues online with each other. So because the stigma's coming down so rapidly, our ability to influence will, I think, go up. The epidemiology may or may not change. We had the COVID lockdown that provides a previous episode for some new moms, but for sure, we're going to see diagnosis and treatment rates go up. Understood. Okay. Maybe pivoting a little bit now to your recently announced restructuring. For those in the audience that may not be familiar with the specifics there, just kind of walk us through, what's been reprioritized, and I guess, what does the new business structure now look like? Yeah. So as we said when we did our business update call after getting the FDA news, that we were going to take a deep look at prioritizing our pipeline. Our philosophy was that we needed to get much smaller in size ourselves for a PPD-only ZURZUVAE launch. So any spend, any spend for MDD, you know, as immediately could be stopped as possible, we stopped. And we sized ourselves now to create value from here and build significant value with ZURZUVAE and the rest of our pipeline. We're prioritizing ZURZUVAE for PPD only. Mm-hmm. We have SAGE-718, which we touched on early in my comments, reading out all those trials next year. It made sense to continue to do that and read those out, and then make decisions about what's next after that. We've got SAGE-324, the GABAA PAM, KINETIC 2, accrual ending this year, read out next year, so it made sense to complete that. And then for some of our earlier stage programs, we took each program to its next logical value inflection point, so that if business circumstances changes six months, a year, two years from now, we can reach back out and continue to prosecute the pipeline. We didn't think kind of abandoning programs on the side of the road, if you will, was the right business strategy. So the restructure was about 40% of our workforce, and that now gives us runway into 2026. Understood. Okay. So SAGE-718, maybe we can talk about that program. You mentioned some data readouts next year. You have a number of studies going on with that program. So just remind us which studies are underway and what can we see from those programs next year? What could we learn, and what... And I guess the important question there is, from your perspective, which key questions about the molecule do you think those data sets are going to de-risk for you? Yeah, that's a great question. So we've got multiple trials set up in Huntington's and then Parkinson's and Alzheimer's. Let me kind of go in reverse order. Sure. The way we've designed the Alzheimer's and Parkinson's trial, placebo-controlled trials, is to understand the effect size on cognition, and obviously, side effect profile. What we've seen thus far is that when orally taken, SAGE-718 dramatically increases cognition in a very rapid period of time. So both the Alzheimer's and Parkinson's trials are there to teach us effect size, variability, safety profile, to allow us to effectively design the phase III trial or trials, should we, so to speak, so should we do that. The Huntington's trial, on the other hand, there's nothing been developed like this in Huntington, so we're sort of blazing new pathways here in terms of regulatory pathways. The way we've designed the Huntington's trial is we have a very large trial that is measuring cognition in Huntington's patients via HD-Cog and a number of secondary endpoints. That's going to tell us the numerical improvement in cognition in three months. We're also looking for safety. We've got another parallel trial going that's measuring activities of daily living. So for example, if we see a multipoint change in HD-Cog, and then we see activities of daily living, that someone at the beginning of study could make a list, drive to the store, buy the items on the list, return home one out of 10 times, can they do that five out of 10 times at the end of the study? So we have a numerical tie to activities of daily living. Obviously, data here matter. Mm-hmm. We believe that we've designed the Huntington's trials in a way that, given the orphan nature of Huntington's disease, that it's a reasonable package to go forward with regulators and understand the path to approval. Got it. Okay. Assuming the initial data sets here are positive across indications, do you think there's potential to pursue partnerships for any of these indications? Or do you think if that's even something that you're considering, that would be further down the line for SAGE-718? Well, you know, for 718, our, our position had been that 718, given the improvement of cognition, given the big unmet need, and then starting with Huntington's, since it's an orphan disease, that SAGE-718 is something we could globalize Sage on. That's if everything went well. Well, obviously, we hit a bump, so we need to examine it. What I can say is that when we had the Alzheimer's readout, which was an open label probe study, there was significant inbound partnership interest. So that's something that we certainly wouldn't do before data readout. But after data readout, if we, if we need to, from a company perspective, a balance sheet perspective, do some kind of partnership, that's certainly a partnerable asset. ... Okay, got it. And then I guess if you were to look at partnerships beyond capital, what would be additive to bring into Sage? Like, what would be interesting from a know-how and capability standpoint? Well, I think from a business development perspective, there's a little bit more sell side opportunity than there is buy side right now. Besides SAGE-718, we've got earlier stage programs that are also interesting to people, so there's always those opportunities. We can't guarantee they happen, and we may not want to make them happen, but there are opportunities there. You know, in terms of what we bring in, we're always intellectually curious, and since Sage has an expertise in brain health, brain penetrant drugs, oxysterol chemistry, neurosteroids, we're always looking at different targets and mechanisms and data. And if something kind of fit in the bag or fit to our strategy, we could look to bring that in. But we do have a broad pipeline of our own to prosecute that we're not taking full advantage of right now, given the circumstances. Got it. Okay. And on that topic, then maybe we can talk about 324, the KINETIC 2 study. Just update us on how that enrollment for that program is going and when we can expect to learn more there. Yeah. So SAGE-324, that is a chronically administered GABAA PAM that we're looking at for movement disorders, starting with essential tremor. So pre-KINETIC, the question we had was: If you administer SAGE-324, do you see change in tremor amplitude? The answer was yes. Then we ran KINETIC to ask ourselves: Do we give it every day in the morning at kind of the max dose, which was 60 mg? Do we see change in tremor amplitude at the end of 28 days? And does that change in tremor amplitude align with activities of daily living? The answer there was yes. Now, in KINETIC, we saw a greater discontinuation rate than we wanted, yet the study was still statistically significant positive. We have a big enough n to make it happen. The questions we're answering with KINETIC 2, it's a three-month study, and we're doing dose exploration 15-30 and then kind of dose escalation to 60, kind of titrating it up to 60 over a six-week period. The question is: What kind of safety do we see over that three-month period? What's the discontinuation rate? And then do we see continued efficacy, not just at 28 days, but out to two and three months? So in other words, there's no tachyphylaxis, the drug continues to work, and these people suffering from essential tremor have improved their tremor amplitude, and that tremor amplitude improvement is consistent with improvement in activities of daily living. So that's the full package of readout. If the data are strongly positive and, you know, the adherence rate is very high, then we have a drug to move forward with. If any of those things come in negative, then we got to ask ourselves if that's the right profile of drug to move forward with. Got it. And assuming it hits your hurdle and you do want to move forward with it, what does a pivotal program here look like? Yeah, so we haven't... We, you know, we don't even have the KINETIC 2 data, so I'd just be speculating. It would be a longer study with a dose that we think is right, administered at night. Exactly what the design looks like, it's too early to talk about. Got it. Okay. Fair enough. So post the restructuring, your pipeline is obviously ZURZUVAE, and then SAGE-718, SAGE-324, or any other well-developed pipeline programs still under development at this point? So we've talked about two. We've talked about SAGE-319- Mm-hmm. which is our extrasynaptic-preferring GABAA PAM. That we'll take to its next logical point, and then the SAGE-421, which is an NMDA PAM, that we'll take to its next logical point. There's some earlier stage stuff that, again, we're not going to abandon. We're going to finish the work, wrap it up, and then have it be available should business circumstances change, and we might, and we need to move forward. What's exciting about SAGE-319 is the hypothesis that it has the same kind of activity as the other GABAA PAMs, but a differentiated profile because it's extrasynaptic preferring. So we'll see if that holds true. Okay, got it. And then over the course of the next year or two, do you think it's realistic to see more programs enter the pipeline? Or do you think that with your current set of programs, you're kind of more in an execution phase with the launch and just developing these programs out? The latter. Given the restructuring we just did and the runway we now have into 2026, our focus really is the effective launch of ZURZUVAE and PPD, and demonstrate to you and others that there really is an important market here. We can help a lot of moms that are suffering, and we can grow or kind of make this market, which just doesn't exist today because the solution sets are challenging, all of them, even ZULRESSO. So that's a make the market opportunity. And then to get the readouts of SAGE-324, SAGE-718, and make some decisions from there. For the earlier stage programs, we're gonna park them in a logical spot and not move them forward till business circumstances suggest we should. Got it. Okay. Let me take a pause here and see if there's any questions from the audience. Oh, look at all those hands that went up. You never know. I had one in three sessions ago, so... Not yet. Okay. I can keep going. So let's pivot back to the commercial launch in PPD. You alluded to this a little bit, but maybe we can try to put a fine point on it, to the extent possible. When thinking about what the first-year performance looks like, when thinking about the ramp quarter-over-quarter, going from 1Q to 4Q next year, I know you're not in a position to provide anything like guidance or anything close to guidance, but just qualitatively, how do you think about what's a sensible ramp and scope of, scope of revenue opportunity to think about for the first year? Yeah. I think the way to think about the first, call it 12- to 14-15 months, is really what are the metrics you're seeing? Not necessarily what's the revenue, but what are the metrics you're seeing? How many healthcare providers are writing? Are they writing depth? What's the breadth of writing? How many moms are flowing through ZURZUVAE, whether it's a free good or a paid good, whether it's reimbursed or not. Our desire is, because this is really about physician experience. Mm-hmm. Once our experience thus far with ZURZUVAE is that once a healthcare provider uses ZURZUVAE and sees the rapid onset of effect and the dramatic improvement in depressive episodes, PPD in this case, then they become believers. And they only have to see one or two of these to see something they've not seen before. And think about what they're dealing with today. Outside of ZULRESSO, they're dealing with another antidepressant that could take four to eight weeks to work, if ever. They're typically titrating from lower doses to higher doses, and it could take weeks to months to figure out if I've got this person in a state of wellness, not, and many are, many are. Many are better, but they're not yet in a state of wellness. So it's really the, it's really the prescribing numbers, the patient flow that we're looking at for the first chunk of launch to understand. You know, once all the insurance is in place and Medicaid's in place, you know, six to 12 months, it's after that time point that kind of revenues will be a guide. But the first big part of the launch is really are about the metrics. Got it. Okay. And, do you foresee use purely as monotherapy, or do you think there's possibility that some prescribers, some patients may be combining ZURZUVAE with more traditional options that they've been previously using? Yeah. So, you know, what we're focused on is effectively communicating and educating on ZURZUVAE. Whether or not the patient healthcare provider of other medications involved is solely up to them, we're not in the business of guiding on other medications. What I can say that in the PPD trials we ran, between 15%-30% of moms came into those trials already on an antidepressant. Mm-hmm. Then about 5% exited the 45 days still on antidepressant. Others, for whatever reason, not driven by protocol, not driven by us, wean themselves off of antidepressants. So we think that ZURZUVAE will be monotherapy in many cases, but it could be combined, and there's no contraindications. It can be combined with other antidepressants, if that's the decision the healthcare provider and mom choose. Got it. Okay. And, you know, when the drug was approved, there was some debate around certain portions of safety language in the label. When you received your label, did any of that language come as a surprise to you, or did it strike you as anything that would impact the commercial opportunity in PPD? So while we were in the review cycle, we tested a lot of different outcomes in the label. Right. What I can say is, there's nothing in the label that is bothersome to healthcare providers or women with PPD that would stop a depressive episode with PPD from being treated. There were certainly interesting, unprecedented things in there. Mm-hmm. So for example, a box warning on driving. We always said we'll have a driving warning. The fact in the box is fine. Now, what's not in the box is the suicidal ideation. That's in the warning section, not in the box. That's in the box of many other antidepressants. So there's some differences here, but nothing that's going to get in the way, in our view, of making the decision to use ZURZUVAE with a woman with PPD. Okay. Got it. In our last 10 seconds, Barry, anything you would highlight that we haven't talked about? Any key milestones or developments that you think people should keep on their radar for the next six to 12 months? Well, we didn't talk about it, but I, I guess I'll repeat. Sure. You know, we've been through a thing, and this is the biotech world, it's unfortunate, but we're really well positioned to take advantage of ZURZUVAE and PPD, and we have a very catalyst-rich 2024 with a number of data readouts across both SAGE-718 and SAGE-324. It's a really exciting time for Sage. Okay, great. That's a good place to close it out. Barry, thanks for your time. Thank you. Appreciate it. Thanks, everyone.