SAGE (2020 - Q2)

Ladies and gentlemen, thank you for standing by, and welcome to the SAGE Therapeutics Second Quarter 2020 Financial Results Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, Jeff Boyle, Senior Director of Investor Relations. Thank you. Please go ahead, sir. Jeff Boy

Good morning, and thank you for joining SAGE Therapeutics second quarter 2020 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 would 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 Dr. Jeff Jonas, our Chief Executive Officer; Mike Cloonan, our Chief Business Officer; and Kimi Iguchi, our Chief Financial Officer. We will then be joined for the Q&A session of the call by Dr. Steve Kanes, our Chief Medical Officer and Jim Doherty, our Chief Research Officer. I will now turn the call over to Jeff.

Thanks, Jeff, and thanks everyone for joining us this morning. We are pleased to update you today on our second quarter with progress across our development programs. Today I'll provide an overview of our second quarter activity and discuss our depression, neuropsych and neurology franchises, then Mike will provide a more detailed business update and lastly, Kimi will provide an update on financials. As all of you are aware, we're operating in a new environment with the challenges of the global COVID-19 pandemic. However, even in the face of these challenges, I'm pleased to report that execution of our clinical program remains on track. We're aware that some companies made the decision to stop or pause recruiting enrollment in clinical trials. But I'm pleased that the teams at SAGE were proactive in their planning and management of our trials. As you know, our lead clinical asset is zuranolone and studies for major depressive disorder and postpartum depression. Additionally, we have SAGE-324 in development for a central tremor, and SAGE-718, which we are exploring based on early study findings we believe are compelling for rich potential in areas where executive function is impaired. Based on our progress in the last six months, we expect to have numerous catalysts coming over the next 18 months. We've been able to advance several programmers, and I've had strong enrollment to date on zuranolone WATERFALL study. We have been dosing subjects with 50 mgs in our SHORELINE study as well and have advanced the anticipated top line readout for our SAGE-324 tremor study to the latter part of 2020, or the first quarter of 2021. So we are running on or ahead of schedule across our development programs. In some, during the second quarter, we initiated four new clinical trials across two franchises. I'd like to comment further on our Depression Franchise. We set out to develop a therapy that we believe if successfully developed and approved will be an important and unique option for people with major depressive disorder, or MDD. Our clinical programs are designed to answer very specific questions to achieve this goal. And we are executing in a stepwise progression. We believe that patients want to get well quickly and stay well, and many would prefer not to undergo chronic pharmacotherapy. In this light, we believe both ZULRESSO and Postpartum Depression and Zuranolone MDD and PPD have pharmacological characteristics consistent with this type of approach. As a reminder, zuranolone program has been designed to achieve a first NDA as efficiently as possible with three ongoing studies where each with a positive outcome supports a unique potential filing pathway. For each pathway, we believe just one additional positive acute study is needed to show efficacy. As noted earlier, we made significant progress towards this goal by initiating dosing with 50 mg in our Phase 2 WATERFALL study in patients with MDD. Based on our enrollment, which has now surpassed 50%, we have updated our anticipated completion date for the WATERFALL study to the first half of 2021. We've also initiated dosing and a postpartum study to say our Phase 3 SKYLARK program. Top line data from the SKYLARK study is anticipated in 2021. And finally, as noted earlier, we initiated dosing in the 50 mg cohort of our Phase 3 open-label SHORELINE study. Top line data from the SHORELINE study 30 mg is expected by the end of this year, and it is also possible we will have preliminary data from patients who received 50 mg from the study by year-end as well. We're also on track to commence dosing in the Phase 3 CORAL study later this year. Recall, the CORAL study is looking at zuranolone 50 mg as an acute rapid response therapy, and MDD when co-initiated with a newly administered standard antidepressant. Mike will talk about the utility of this potential indication later in the call but what I can say is that we now have three shots on goal to bring zuranolone to market. Today we're also reporting results from the six-month follow-up arm from the MOUNTAIN study. As we said, have to understand more about the durability of zuranolone, we asked what happens to treatment responders at six months. This has been an important question and an area of speculation as clinicians need to understand the treatment path for patients, who respond to zuranolone. As part of the MOUNTAIN study, subjects will offer the opportunity to participate in a six-month blinded follow-up to assess durability of response in those patients, who responded after 14 days of treatment. As a reminder, the study was not powered to detect statistical significance from placebo beyond day 15. About half of the study participants elected to participate in the follow-up. And we were pleased to see that more than 80% of those who completed the six-month follow-up period. There were no drug related adverse events, changes in labs, EKG measures, vital signs or sociality ratings seen following exposure to zuranolone, and there were no signals of withdrawal a rebound after treatment with zuranolone was completed at day 14. We were also pleased to see that approximately 75% of the patients, who responded to zuranolone 30 mg at day 15, maintain their response rate at the last follow up on day 182. This was true of the overall population regardless of treatment arm, but more importantly, for those who saw a significant benefit from zuranolone 30 mgs that is the population with a handy greater than or equal to 24 baseline. The improvement over placebo seen a day 15 was sustained over the full six-month period, and at no time during the follow-up period to the change from baseline in MDD in the placebo arm surpassed that in zuranolone 30 mg arm. This is just the persistence of benefits following the initial two weeks zuranolone course. This benefit was seen regardless of whether or not the patient was treated with SSRIs. We believe these data support our vision for a unique treatment profile for zuranolone for people with MDD. We understand development of an as needed therapy in MDD runs entirely counter to the status-quo of assuming all patients require chronic drug treatment and we understand two decades of one approach will require data to affect change. We believe these data are another step along that path. We're looking forward to the top line data readout for the zuranolone 30 mg cohort in the SHORELINE study, which we would expect will be reported by the end of the year. Before I move on, I want to re-emphasize that our goal with MDD is nothing less than to offer a disruptive, distinct and novel treatment approach for patients. There are already several things we've observed in clinical trials with zuranolone to-date, which we believe along with our six month data suggests the potential for zuranolone to be uniquely situated for this approach. First, we've observed rapidity of response within days that has been consistently observed across our studies. Second, the drug has been well tolerated in these studies with more than 2500 subjects. There have been no adverse events of loss of consciousness including up to doses of 90 mgs evaluated in our clinical pharmacology studies. And third, there have been no signals of rebound or withdrawal after the drug is stopped. I'm sometimes asked why we are looking to treat depression, like a medical condition rather than a chronic disease that labels a person as a mental health patient. It's long been recognized that the preference or reliance on chronic pharmacotherapy is a problem in psychiatry. And the numbers bear this out. 17 million new diagnosis a year for major depression but nearly twice that many people remain on treatment for two years or more. We see this as an area of substantial unmet medical and societal need. If we are successful, zuranolone has the potential to allow patients to get treated, get better quickly and not require another treatment until when or if he or she has another depressive episode. As you might expect we are treating any other medical condition. Now turning to a new development with brexanolone, we are pleased to announce that under the FDA's coronavirus treatment acceleration program or CTAP, brexanolone has been cleared for a Phase 3 study in people with advanced COVID-19 related acute respiratory distress syndrome or ARDS. This announcement comes after several months of analysis of brexanolone clinical and preclinical data. As many of you know, we already have extensive ICU experience and generated significant critical care data with brexanolone in our [SRSE] trials. SAGE also has extensive chemical equity and medical chemistry experience, and we've been looking at other ways our compounds may impact peripheral receptor systems. The brexanolone trial and COVID-19 related ARDS will involve several leading academic centers. SAGE has undertaken this initiative believing there is a sound rationale to test whether brexanolone may be able to mitigate the morbidity and mortality associated with COVID related ARDS. It's also we believe the right thing to do. We look forward to answering further questions about this trial during our upcoming Investor Day planned for September. Turning now to our Neurology Franchise, we've begun dozing in our Phase 2 double-blind study, which we are calling KINETIC, with SAGE-324 at 60 milligrams in essential tremor. As a reminder, the central tremor is the most common movement disorder in the U.S., affecting an estimated six million people in our country. Earlier open label data with SAGE-324 demonstrated it is a compound with the pharmacologic characteristics, we believe are well suited for development opportunities not only in a central tremor, but also in epilepsy and Parkinson's disease. We anticipate reporting top line data from the essential tremor trial in the fourth quarter of this year or the first quarter of 2021. We're also on track to initiate our Phase 2a open-label study with SAGE-718 in the second half of 2020 the lead asset in our neuropsych franchise and our most advanced and NMDA PAM, in patients with Parkinson's disease cognitive dysfunction. Results from this study, which we are calling the paradigm study will inform the potential advancement of SAGE-718 in various disorders of cognitive dysfunction. As a reminder in early studies SAGE-718 was well-tolerated, and patients as well as healthy volunteers demonstrated improved performance compared to baseline on assessment of executive functioning. We believe the data we generated in our Phase 1 program support our hypothesis that SAGE-718 may be relevant to multiple disorders with impaired cognitive dysfunction, including Huntington's, Alzheimer’s, and Parkinson's disease. Before I turn it over to Mike, I want to share my appreciation for the team at SAGE. The team is executing well across all franchises to advance our therapies as quickly as possible for the benefit of patients and families. We believe we've created a novel drug company successfully able to convert our chemical equity library into a rich pipeline of clinical assets that a new chemical entities and not just repurposed molecules. So with that, I'll turn the call over to Mike.

Thanks, Jeff and good morning, everyone. As Jeff mentioned, we've made significant progress over the last quarter with the initiation of four new clinical trials. We've built upon the rigorous prioritization and resource allocation we began in the first quarter as we continue advancing programs across our depression, neurology and neuroscience franchises. Let me add a bit of perspective on how we're thinking about positioning the differentiated profiles Zuranolone in our depression franchise if successfully developed and approved. We have consistently observed rapid response within days and good tolerability of Zuranolone in our landscape clinical program to-date. Rapid action in depression, if also seen in our ongoing and planned trials would be an important profile for Zuranolone whether use episodically or treat as needed, or as a rapid response or RRT therapy when co-initiated with a new antidepressants. Physicians, patients and payers have consistently viewed the many unique characteristics of this target profile positively. As you know we initiated dosing in the WATERFALL study, and updated our guidance on an anticipated data readout to the first half of 2021. We also initiated dosing in our PPD studies SKYLARK, as well as the 50-milligram cohort and the ongoing SHORELINE study. We are on track to begin dosing in the CORAL study the acute rapid response with a newly administered antidepressant study. During the second half of the year, as we think about the end game for Zuranolone if we're successful, changing the paradigm by moving towards a treatment as needed, or episodic option, there are going to be physicians who will want to use Zuranolone at least initially, in combination with traditional antidepressants, until they get comfortable with Zuranolone as a standalone agent. This is consistent with the CORAL study design, which we are on track to initiate this year. If the CORAL study is positive, we expect to first seek regulatory approval for use of Zuranolone when coinitiated with a new antidepressant in the treatment of MDD. If we receive approval in this indication, it would give us an opportunity to leverage the profile for physicians, patients and payers to gain real world experience with Zuranolone and better understand the rapid acting profile. And if WATERFALL and the longer term safety data are positive, we think the combination of the RRT experience and the retreatment data from SHORELINE and REDWOOD will expand the labeling and use making the transition to episodic treat as needed much more efficient. This means that physicians will be able to take a phased approach in changing the treatment paradigm, building on their own experiences along the way, from using Zuranolone in conjunction with a newly administered antidepressants, to prevent relapse, to the use of Zuranolone as needed, or episodically to treat subsequent episodes. The receptivity to a unique target profile is there, we have heard the questions on durability, including what happens after Day15 and Day 42. With the six-month MOUNTAIN data we just announced, and with the SHORELINE data anticipated by the end of the year, we continue to build our datasets to help answer some of the questions we anticipate receiving from key stakeholders. We want to give patients and physicians another option in the treatment of MDD. And if we are successful, we believe Zuranolone can offer not only a clinically differentiated treatment option, but also a commercially differentiated approach. This is another example of our overall strategy we leverage learnings and quickly adapt, all with the mission of bringing medicines that matter to people with brain health disorders. With ZULRESSO we are executing as expected. Revenue during the quarter was 1.1 million, and as anticipated was impacted by COVID-19 as multiple hospitals continue to prioritize their bed capacity, reducing elective admissions like ZULRESSO. Through Sage Central, we can remain close to all the treating sites of care to understand their ability to treat PPD patients and any shifts in their approach. We will continue to support geographies with active existing treating sites and support PPD patients through the process. Given the ongoing surge in the number of cases of COVID-19 in the U.S., and continuing concerns about the pandemic across the country, the company expects the significant adverse impact of the pandemic on ZULRESSO revenues to continue. Jeff provided a thorough update on the clinical progress we've made with SAGE-324 and essential tremor, and our plans with SAGE-718 in indications involving cognitive dysfunction. I'll spend just a few minutes discussing the tremendous unmet need for patients suffering from these disorders. With ET, we're talking about the most common movement disorder, affecting an estimated 6 million plus people in the U.S. Despite its high prevalence, only about 20% of people with ET seek treatment. And for cognitive dysfunction, associated with diseases like Huntington's, where we've already seen an early signal pointing toward the potential for improvement in executive function, and other neurodegenerative conditions that manifests with executive functioning deficits like Alzheimer's and Parkinson's. We're talking about the potential to improve cognitive dysfunction symptoms that track closely with functioning in the real world. By improving these symptoms, our goal is to provide patients with the opportunity to remain more cognitively intact and potentially retain the ability to live and thrive independently. And so, we believe SAGE-324 and SAGE-718, if successfully developed and approved, have the potential to become truly innovative treatment options with the potential to help millions of people and their families. Before I turn it over to Kimi, I also want to take a minute to express my appreciation for the team at SAGE. They have worked tirelessly in executing with precision during these challenging times and supporting our mission to bring medicines that matter to people with brain health disorders. I feel as confident as ever, that our execution against the well thought out strategies will enable us to get medicines that matter to patients as quickly as possible. And now I’ll turn the call over to Kimi to review our financials.

Thanks Mike. This is a year of execution for Sage with cash on hand anticipated to support operations into 2022. We have a clearly defined path forward designed to advance programs across three green-health franchises. Our experienced team is working to create value by converting our extensive chemical into equity into a rich pipeline of clinical assets in areas of unmet medical need. We remain true to our mission. As a reminder, we started the quarter with a difficult but prudent decision to restructure the organization. But we ended the quarter with the extensive list of accomplishments and progress that you heard from Jeff and Mike. As we move into the second half of the year, we do that with a solid financial position to continue to build on those achievements. As you've heard me say many times before, at Sage we take a portfolio approach to how we think about resource allocation with the goal to maximize the value of our opportunities. By reprioritizing our activities and rethinking how to deploy our resources. We anticipate analyze cost savings as a result of the restructuring of approximately $170 million. These savings are intended to help Sage advance our mission to deliver medicines that matter to people with serious brain health disorders. I'll now walk you through the highlights of our second quarter 2020 financial results. Revenues were $1.1 million in the second quarter from sales of ZULRESSO compared to $0.5 million of collaboration revenues from the Shionogi collaboration for the same period in 2019. As Mike noted earlier, ZULRESSO revenues have been significantly affected by COVID-19 in the U.S., and we expect a significant adverse impact of the pandemic on ZULRESSO revenues to continue. Selling, general and administrative expenses were $38.2 million in the second quarter compared to $88.2 million in the first quarter of 2020. A reduction in commercial support for ZULRESSO was the primary driver of the decrease in the SG&A in the second quarter. And as part of the restructuring, we recorded a charge of $28 million in the second quarter. Research and development expenses were $73.3 million in the second quarter, compared to $89.1 million in the second quarter of 2019. The decrease was primarily related to the completion of the MOUNTAIN study, and a decrease in the non-cash stock-based compensation expense. Finally, we reported a net loss of $136.3 million for the second quarter of 2020 compared to $168.2 million for the first quarter of this year. We ended the quarter with $757 million in cash, cash equivalents, restricted cash and marketable securities. As previously stated, we anticipate ending the year with approximately $550 million in cash, which we expect will provide runway for us into 2022.We're looking forward to the second half of the year we anticipate continued savings from our restructuring and resource reallocation. In closing, we expect the second half of 2020 will be highlighted with proof points to illustrate our ability to execute, showcase the progression of the pipeline, and show the value of our chemical equity. This will be accomplished in part by the strength of our balance sheet. And I'm confident that we have the right team in place at Sage to execute on all the opportunities. We look forward to sharing our ongoing updates. I'll now turn it over to Jeff for closing comments.

Thanks Kimi and thanks, everybody and good morning everyone. I just want to make a few more comments prior to are going to question and answer. I think as you've heard today, that the execution of our clinical programs remains either on track or ahead of schedule. And that's no small part of the efforts of the folks at Sage are working through these programs. Our goal remains constant with respect to Zuranolone. We are looking to disrupt the treatment model in depression. We understand that is something that may be hard to do, but it's something that we think meets an important unmet medical need in the treatment of psychiatric disorders. As you've heard today, with our Phase 3 initiation for brexanolone into COVID-related ARDS, we have a distinct and active discovery group and medicinal chemistry group and we're looking to leverage that expertise as we move forward. We have clearly defined pathways to advance all of our programs across all of our franchises and as you can hear today, we have a catalyst rich year and a half upcoming, where we hope to report on this progress over time. So with that, let me open the call to questions.

[Operator Instructions] Our first question comes from Akash Tewari with Wolfe Research. Your line is open.

I have a few if I may, so I wanted to dig into what the 50 mg dose can and cannot help with. So number one, will the 50 mg dose ensure that patients who take 217 without a proper meal would still maybe get into a therapeutic drug concentration or would that just not be possible if you don't take it with food? Number two, we're the patients in the MOUNTAIN study, generally heavier than the ROBIN study and will the 50 mg dose allow for a greater percentage of those patients to hit a therapeutic threshold? And then lastly, can you give some color on how your PK curve evolve over time as you go from a single ascending dose, the multiple ascending dose for 217? Like visually, how does that PK look like and how would you define someone who would be low exposure versus high exposure? Thank you.

It's Jeff. I'm going to start and I'm going to turn this over to Jim. Just some broad commentary, one of the goals of any drug development program is fixing the proper dose. The metrics and the biomarkers and the analysis required are not necessarily straightforward. I know people like to look at it that way, but they're not. And as a company, I just have to say that, as I think you're alluding to picking the right dose can be challenging. And in fact, we think that the 50 is a good dose as we've mentioned earlier, we've now dosed up to 90 it's very well tolerated, and so we're comfortable about the 50 mg dose, but that analysis that has led us to the 50 in some spark remains proprietary. We realize that this could be a competitive advantage for the company. We know we have a lot of fast followers looking at these mechanisms. So a lot of this we just have not disclosed and will not disclose. With that said though, the performance of the 50 to date, I think as we've mentioned earlier has been quite satisfactory, if not going up to 90 mgs and so we're very pleased with that. I'm going to turn the rest of this over to Jim Doherty.

Hi Akash, yes. To answer a couple of your questions in a little bit more detail, so first around the 50 mg and PK a Jeff said, we are quite confident in the performance of the 50 mg dose from the data that we've seen so far. And so, yes, we are confident that by dosing 50 mg, we are moving the population into a range of exposures that we think is going to be consistent with efficacy I think. Obviously, each individual person responds a little bit differently, but we do think that this does gives us the right balance the folks into an efficacious range. And your question around body mass, I would say that all of our trials, we see a pretty consistent picture of body mass for individuals, and pretty consistent with most of the U.S. population. And then to your point around PK profiles, yes, we think that the PK profile for zuranolone, which we call was designed to have once a day kinetics in human gives us really a very good opportunity to sort of keep the exposure levels where we think they need to be the efficacy in our studies across a population

[Operator Instructions] Our next question comes from Paul Matteis with Stifel. Your line is open.

I just have a quick follow-up on this MOUNTAIN of six-month data. Can you just quantitatively speak to how you define responder or maintenance of response at six months? You know, I guess in the Phase 2 MDD study, we saw a couple point up creep MDD day 15 to 42. Would kind of something in that margin of error constitute maintain response. And then I was wondering if you could just comment on the proportion of patients that initiated an SSRI during follow-up, and how this kind of all informs your expectations for SHORELINE? Thank you.

Yes, I'll take this. I take I'll turn it over to Jim. Couple of points I want to make. First is, one of the interesting findings that all the six-month data has shown runs counter to the current mythology around depression that you have to stay on a drug. And that's the sort of most striking finding to me. And I think to us as we move forward to this notion that if you have depression, you don't have to be on an antidepressant for the rest of your life. And so that's number one. And I think what really came home and if you look at the population that had a response, and I think that's the 24 and above, what you see there is actually a constant or very constant separation, pretty steady between drug and placebo. And what that indicated initially, and what suggests is that if you respond to the drug, you continue to respond to the drug even after the drug is stopped. And we think that is a unique finding. With respect to antidepressants, this was also what made us - that what encourages us first about these data. And we also - it gives us a lot of optimism about SHORELINE. And that is only a very small number of patients actually started new antidepressants. And overall, I'd say it was only a handful, and overall, it's only about 30% of the patients were on SSRIs during the study. So this really does run counter to the dogma, the dogma about depression that you have to be on a drug and that you're - you must be chronically treated. And for us it has been very encouraging when you see that almost 75% of the patients maintain their response, and with the 24 and above, which of course is the relevant population where we had a positive endpoint that response is maintained out to 182 days. The study was not powered for significance, but even then the p value there was 0.6. So this was a very strong finding and when I think that I have to say exceeded our expectations. Jim, do you want to add anything else to that?

I think I just would reiterate, Jeff that when you look at the data. I think the key message is that patients who are seeing a benefit, patients who are getting better at that day-15 timepoint, are staying better. So Paul, we'll put the detailed data together from the MOUNTAIN study for presentation later. But, the answer to your question is, the scores are pretty similar to what they were in those early days at the six-month timepoint.

Thank you. Our next question comes from Tazeen Ahmad with Bank of America. Your line is open.

Thanks for taking my question. One of the focus on essential tremor if I could. Can you give us a little bit of color on why you think it will be important to look at the primary endpoint at day-29? And then as it relates to upper limb tremor score? Can you walk us through the importance of that and how physicians view that particular score in general as it relates to EP? Thanks.

Yes, Tazeen this is Jim, I’ll take that one and then I'll ask Steve to weigh in a couple minutes around your question around how position to see upper limb score. So of course, this study that we're talking about, that was initiated for SAGE-324, the KINETIC study is building on what we've already learned both from our earlier programs but importantly from the work we did last year in the 324 program where we confirmed that neuroto like 324 has a significant ability to reduce - tremor in essential tremor patients. Those studies were done with acute dosing. And so, we are at an important stage of progression for the program. Essential tremor is a chronic disorder and so that 28-day timepoint is our next step in showing the sustainability of the response to 324 that we've seen earlier. And I'll mention around upper limb scores that is one of the most sensitive and measures for essential tremor patients. And also one of the most troubling when you think about daily life and what people are trying to do. But Steve, let me let me have you jump in at that point.

Sure, we've been looking at this quite a bit Tazeen as we've been working in essential tremor since early days with initially ZULRESSO then 217. And as Jim said, we've seen very consistent results across the board. We consult with experts in the field and they have told us that upper limb tremor is the most debilitating part of the symptom complex where you could have tremor anywhere, the inability to do things like write, crank or and its intention tremor. So the more you try to do something, the worse the tremor gets. Those are the things that really get in patient's way on a day-to-day basis. So there's a few things that we really been focusing on one, the upper limb score. We have to make sure that's improved across the board. And that's something that we've seen consistently. The other is given the level of use of accelerometers and other wearables it’s something that we're able to track throughout the day. So there are real advantages in understanding the signal understanding effects on patients as well as the ability to understand what impact our development program may have on this patient throughout the day.

Our next question comes from Brian Abrahams with RBC Capital Markets. Your line is open.

This is David [indiscernible] on to Brian. Just two quick questions the first, looking ahead. How are you thinking about the landscape of depression evolving ahead of any potential launch and maybe just your latest thoughts on how the pandemic might have affected mental health and telemedicine and how you see that potentially evolving ahead of the next couple of years? And then the second question, just on going back to the WATERFALL trial and the enrollment that you're seeing, I know that there's definitely synergies from the MOUNTAIN trial. But I'm just wondering if you see any extrinsic reason for why enrollment might be better as possible, read through to the other MDD trials, including CORAL and RRT?

Okay, this is Jeff, thank you. Thanks for the question. In general, I think we're seeing an increased incidence of reporting of people with mood disorders. But, psychiatry and depression has always been a major area of unmet medical need. And so, I think what we're seeing in the Mountain study, there are a couple of things that we're seeing in the MOUNTAIN study. And I’ll go to your second question first one is, there is increasing interest among people who are doing depression studies looking at novel therapies. And if you think about all the therapies that are currently in development, they all have - they all really are of a kind except for Zuranolone. They are two to six to eight weeks and then chronic pharmacotherapy, for as long as the physician requires it. We just think that patients deserve another option. And we're seeing tremendous interest in our studies, because the Zuranolone data really, so far and now with the six month data, I think it's even more so that there may be a different and unique way to treat depression. So, we view that as an area of interest and an area of uptake that has really spurred interest in our trials. Also, the team has done a great job. I mean, I think they I think as I said at the start a lot of people have - stopped their studies or thought they couldn't do studies and our teams really done a nice job proactively preparing for this environment. And the reality is, there are a lot of people who are depressed. Now, the second point is that as you - if you think about the face of depression, I think that's really something that we are really interested in changing. And with COVID, I think what you're seeing is a greater recognition of the importance of mental health, the importance of, and the morbidity associated with depression. In terms of lack of function and lack of - engagement and it's brought home as people are not distracted by work. And have more time with their families where people can be - where depression can be diagnosed. We don't think the diagnosis has changed obviously. We think that using rigorous criteria, we can find people who have made real depression versus reactive depression, which is what we're distinctly not treating. But we do think that face of depression is treating and we believe very firmly in fact, probably more now than we have in the past, that there is a real need for not putting everyone who gets depressed on a drug therapy for years and years and years. We think that, Zuranolone with its profile, with its ability to show rapid response with its tolerability profile, really can offer a disruptive and unique approach to treating depression, especially as the treatment of depression becomes ever more recognized as something that's an area of unmet medical need.

Yes, maybe just let me, this is Mike, let me just add on to that, Jeff. I think you said it well and I also think just - if you think about our two shots on goal that Jeff alluded to before right, we have the RRT option for patients and then we also have the end game we’re just getting the product or treat as needed. And as Jeff said like, there has not been a molecule like Zuranolone that is - even that will give the physicians and patients this opportunity to treat as rapidly within days and see that effect if we successfully get either RRT or the episodic treatments over the line. And the way we see this playing out is we'll be able to move this paradigm in time right. So, we will evolve the paradigm, but we can start with the RRT indication, allow patients and physicians to get comfortable with the rapid acting nature of Zuranolone while they're using an in combination with the antidepressant standard, antidepressants. As they get that real world experience and we can publish REDWOOD data and the SHORELINE data and they get more comfortable with their treatment data. That will give us the opportunity to expand the label and to evolve that paradigm to that treatment as needed approach that we think is really important for patients. And that's what we hear back from patients and physicians. This is what's important to them. And it's giving them multiple approaches as to how to treat MDD and allow us a chance to evolve that paradigm over time.

[Operator Instructions] Our next question comes from Ritu Baral with Cowen. Your line is open.

This is Lyla on for Ritu, thank you for taking the question and congrats on the progress so far. I was wondering if you could maybe speak to the dropout rates or maybe patients sought to follow-up that you're seeing was SHORELINE maybe COVID have any impact on your ability to follow-up with patients? And can you remind us that patients need to come in for the treatment or they can initiate the telemedicine and have it delivered to their home? Thank you.

This is Jeff, we've not seen much of an issue with that. And I think we've always used various maneuvers to assure compliance in terms of follow-up. And if you take a look at our six month data, compared to most psychiatric trials. We have an astonishing amount of follow-up I think was almost 80% that’s really I mean, I've done this a long time. And that's a very good follow-up number and part of this is due to the diligence of the teams and the nature of the trials designs that we instituted to encourage patients to maintain the blind. And - if you look at what we did with MOUNTAIN in particular, I'd argue that, I can't I don't think we can find another six month blinded follow-up of any drug after the drug has been discontinued unless watch these patients naturalistically. So we haven't seen really this much as an issue. As I mentioned, we've done a number of internal manoeuvres to show compliance and the team has done a great job with that. But one of the things about COVID is it that I think people are depressed, they do need treatment. And depression is a serious medical disorder, and it has not discouraged patients from either participating in trials or in their follow-up.

Our next question comes from Salveen Richter with Goldman Sachs. Your line is open.

Thanks for taking my question. With regard to the six month follow-up cohort in the MOUNTAIN study. Could you just help us understand how to placebo and 20-milligram arms compared to the 30-milligram at six months?

Actually, I'll start and then I'm going to turn it over to Jim. So remember in the overall trial, we did not achieve significance. And so as but, the interesting finding in the overall population as regardless of treatment in the overall population, that the patients who got better tended to stay better. So we were interested and again, that runs counter to the current dogma about depression, which was we were fascinated by, because it's not what you would - what people have been taught. But we've seen this in most of our studies, and at six months, we've seen the same thing regardless of treat. The problem with of course, in the overall population, is that what you see is like with any medical disorder, when people whoever people are, when they get better, they get better that would be through a community acquired pneumonia study where people get better, versus penicillin. But the interesting finding in the MOUNTAIN study was in the relevant population where we saw a treatment effect 24 and above and that's why we looked at it. There we saw continued separation from placebo. And that that persisted whether or not the patient was on an SSRI. And it is important to note that minority of the patients only 30% were on SSRIs. So this is a really unique finding for us and one that we think continues to in a stepwise fashion, derisk our thesis, that there is a way to treat patients with depression, with a drug that acts rapidly and can get people better without the necessity for maintenance therapy. Just as you know, we think this is a pretty unique finding. We are going to publish this and prepare for presentation because we think some of the sciences is important. And it's likely we'll wait for the SHORELINE data because we think that there's a lot we've learned now about the natural history of depression in the modern world that is really runs counter to all the dogma that I think people accept that if you're depressed, you are a chronic mental patient. And we've been very encouraged by the six month data. And we think it's unique and we're looking forward that we will be publishing it and presenting it.

Our next question comes from Andrew Tsai with Jefferies. Your line is open.

Maybe just to follow-up on Salveen’s question of course and press release, press release has noted a large majority of patients maintain response regardless, regardless of arm. So I'm just wondering for the placebo arm conceptually, could adorable response that you saw be attributed to background SSRIs kicking in after six to eight weeks or what could be the explanation of that? Thanks.

Well, this is Jeff. I mean, you have to pretend that if you Google this, look at this like irregular disease. So, in the original study obviously, we didn't have significant separation. So it's hard to interpret those data, what you're seeing in the in the large. And again, just imagine if you have anyone spontaneously remitting from any disease, they spontaneous remit. So if you have one patient, that remission curve will look the same as 100 patients. So it's hard to make much of the overall population except to say, yes, you're right, everyone was a lot on antidepressants. They could have rescue therapy. So that's why when the study, we turn to the 24 and above, where the studies show difference, and that's why we took of course, the relevant population, and that's the majority of the patients in the study, and there you don't see any drift at all. You just simply see the patients 75% of the patients maintain their response after six months. The other point to make and remember is that the relevant question and we're not really dealing with it today because - we don't want to be - we don't want to sort of cherry pick the data. If you look at responders, the majority, almost a large majority maintain their response. And even without intervention. And when you go back to the early days, and I think someone mentioned this earlier, when you look at curves, in the original study, you sort of see those curves creep up sometimes and creep down. You got to remember those curves represent combinations of non-responders and responder. So here, we did a blinded study after six months. And we just, observed stability, I understand - for everyone is counterintuitive. But it looks as though the natural history of depression, remembering two-thirds of these patients were on SSRIs it actually looks like a medical disorder. We know depression waxes and wanes. And it looks as though that it looks just like any other medical disorder. If you get better and you have an accessible treatment, you stay better. The difference is in all of these approaches, even in the MOUNTAIN the original study, the patients on drugs get - show separation from placebo, much more very rapidly within days. So you do you see benefit within the first two weeks even though in MOUNTAIN we didn't see - didn't quite treat it as significance. And for us, plus the six month data that really supports the utility and the rapid rate, RRT approach. We do see early separation, as well as our overall thesis that one can treat depression very differently.

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

Thank you for taking my question and congrats on the faster than expected enrollment in some of the trials. Just a question quick one on MOUNTAIN, have you looked at the data in terms of its consistency between men and women, given that this neurosteroid is more implicated in women any differences you saw in sort of the responses? And then the second part of the question is I think Jeff, you didn't mention a p value of 0.6, I missed it. Could you just tell me just confirm what you were referring to in the MOUNTAIN follow-up? Thank you.

I’ll answer the quick, and then I'll turn it over to Jim. We looked at the difference that - whether it was maintained on the 24 and above, right. So if you're looking at, see if there's a difference, you got to start with the population where there was a difference. And that was not - the majority of the population was 24 and above and even though it wasn't powered to significant after six months. On the blinded analysis, the p value between placebo and drug was about 0.6. So it almost maintained its significance after six months, which was we thought a very remarkable finding, considering that this was a long-term study and it wasn't powered for that. I'll turn the rest over to Jim.

Yes and to your other question. Yes of course, we have looked for whether or not there are differences between men and women as well as the number of other demographic factors in the study. And the short answer is, we don't see any difference between genders in the study.

Our next question comes from Thomas Lavery with Morgan Stanley. Your line is open.

I have a question about SAGE-718. The top line data in Parkinson's disease is expected later this year. What kind of data do you need to see - to move this program ahead next year? Thank you.

Yes, so this is this is Jim Doherty. I'll take that one. So the study that we're talking about is looking at the effects of SAGE-718, with relatively short-term dosing in Parkinson's patients with cognitive impairment. And what we're doing is building off the results that we had talked to you all about at the end of last year, showing that in Huntington's patients we’re able to see acutely an improvement in executive function and other aspects of cognitive function. And so, because this is such a novel space, and because this is such a novel approach, and because we were so happy to see the results that we saw from the Huntington's patients, rather than move forward with the very first patient population that we saw into a more detailed placebo controlled study. We decided to pause and go through the activity of looking at various patient populations. So that's what this study is now. We're going to essentially run a similar short duration study in open label format in, in Parkinson's patients similar to what we did in Huntington's patients to see if that's another patient population that can benefit. We'll also look at other neurodegenerative disorders. And really, this is all built on the role of the NMDA receptor in cognitive function. There's reason to believe that you can see a broad improvement in cognitive function across more than one patient population. And so that's what we'll do with the next study in PD patients is really look to see if we can expand the results that we've seen to-date in HD patients.

Our next question comes from Neena Bitritto-Garg with Citi. Your line is open.

So just wanted to ask a quick one on kind of the regulatory strategy, I know you talked a little bit about kind of next steps once you have some initial data in MDD, and some of these upcoming studies, but once you get data from WATERFALL, I guess, what is kind of the plan for REDWOOD? Are you going to wait until you have data from WATERFALL or do you anticipate maybe reinitiating that study a little bit earlier? Thanks.

Thanks for the question. Right, I think obviously, it will depend on the data from WATERFALL and the data from SHORELINE. Right now, we still have to have some larger study or some study like the longer term analysis, but when we see WATERFALL, one of the things we're going to have to take a hard look at is based on the six month data, we're not seeing a lot of relapses, if you think about patients getting the drug treatment, and you're thinking about 75% of patients maintaining their effect regardless of background therapy or no background therapy, yes, that's something we'll need to take up with the agency, because initially, we had only had follow-up data out to day 42, and we had assumed that people would need sort of recurrent treatment, I think, that assumption so far as being challenged by the six-month data. And we'll have to take a look hard look at SHORELINE, and SHORELINE, which we're optimistic about now, based on the six-month data gives us something like that. We'll revisit what long-term data we might need if WATERFALL reports out positively. Steve or Jim, you want to add anything to that?

Yes, I'll just say a few things. I mean, first of all, just to remind everyone, this is a program that's proceeding under breakthrough therapy designation, which gives us an opportunity to have interactions across the board. And so as the data unfold, we're able to interact with the FDA and talk about what the potential [indiscernible] as breakthrough because we share our understanding of the urgency for developing an entirely new therapy. And that's what this whole program has been designed to do. So yes, when we have data, we'll do - we always do, we just go back to the agency. Remember, it's not just the clinical efficacy data, it's also informed data and everything else that we've been consistently showing across the board. And now with more than 2500 patients that have been exposed to the drug, we have a very clear idea on - what the overall adverse event profile or safety profile is. So a lot of information comes through all of which will lead to the most efficient regulatory strategy forward. So, there is a lot of words to say, as the data unfold, we'll have those discussions and identify the most efficient path forward for patients.

Our next question comes from Cory Kasimov from JPMorgan. Your line is open.

Thanks for fitting me in. So for the RRT study that's on top to begin in the second half, do you plan to piggyback on top of your existing MDD sites? Will they be separate? I guess I'm just curious how fast this can go, since it sounds like this would represent the initial MDD filing? Thank you.

Yes, so there'll be a combination of sites, I mean, WATERFALL is moving quick. We have a lot of really well performing sites. So that I think that we'll continue to try to actually go quickly. I think that one of the lessons of WATERFALL in the lessons of this whole of this year has been that our ability to leverage our infrastructure that we've developed over time, and the team's ability to move quickly from protocol-to-protocol. So we'll be doing that as well. We do think the design of these studies, we do design the studies to be one of a better word palatable to the investigators insights, and one of the advantages of zuranolone in general has been that two week course of therapy potential patient benefit quickly has been greeted with a lot of enthusiasm by a treating clinician. That's one of the encouraging things that we've seen throughout all of this. Jim, I don't know if you want to add anything to that.

Yes, I would just add, Jeff that we have a pretty large network of sites. And so we're confident that we're going to be able to run all the studies and keep ourselves on track for all of them.

Our next question comes from Laura Chico with Wedbush Securities. Your line is open.

Hi, this is Ken on for Laura, thanks for taking the question. So on SKYLARK, zuranolone sales were clearly impacted by COVID, and while the extended disruptions period have stabilized since this spring. What are your expectations around recruitment? And with data in 2021 how should we be thinking about the number of sites that will be necessary for recruitment and more or less before we outpatient? Thank you.

Sure, thanks for the question. This is Jim. Yes, I think the important thing to remember for SKYLARK is that with zuranolone what we're talking about is an outpatient therapy. And so that's just a different opportunity than with ZULRESSO. But certainly from a recruiting perspective, we're anticipating that we're going to be able to recruit for the SKYLARK study in a comparable way to what we're seeing on our other studies with zuranolone. It's a smaller patient population and so of course there will be an impact there. But I think the probably the most important thing is that with an oral drug in an outpatient setting is just a slightly different situation. Steve, do you want to add anything?

Yes, I was just saying with COVID, my preference is that impacting patients sort of being able to be admitted to the hospital for treatment. On the other side of that, of course, is that there is enormous unmet need and that's only growing with increased isolation of women in the face of being delivering without significant others and living room and having to go home without the support of family members and so forth. The rates and potential interest in postpartum depression is only growing. So as Jim said, the trial itself is an outpatient trial, it gets around some of those logistical challenges and just based on our experience with execution, we anticipate being able to enroll that in a very similar way as we have with WATERFALL. So the important issue, it's an important disorder in one that we've been committed to for a long time.

And I'll just comment, this is Mike as well, I think it's important for a couple of points. One is, as we said, we have those distinct pass now for zuranolone, we have the PPD path with SKYLARK right one study we'll be able to seek approval there, we have the two paths with MDD both the RRT indication and the episodic. And the one point, I'll also make in combination with things, very different profiles, right on the PPD side between ZULRESSO and zuranolone, right, the rapid acting nature is still there, but an oral therapy that patients aren't going to have to go into a hospital to receive the 60-hour infusion, right. We're still very excited about the PPD market and what we think zuranolone can do there.

And our last question is from Jay Olson with Oppenheimer. Your line is open.

Were you surprised by the durability of zuranolone in the six months MOUNTAIN follow up, and how do you plan to leverage that finding with regards to your filing strategy and ultimately your target product profile for zuranolone?

This is Jeff, thanks for that question. I don't want to use the word surprise, I guess I'd say we were gratified that the data that we've acquired to date over all of our studies can be now be extended out to six months. We're aware and as I said in my opening remarks that this is really counter to the narrative about depression that you enlist - that patients enlist themselves as chronic mental health patients for the rest of their lives that they're so delicate that they have to stay on treatment for years and years. And those of us who are treated these patients, we've always wanted something better, and we've wanted something different, and so I think we've been gratified by it. I do think that the data really do - I wouldn't say surprised, but the data really - don't run counted like I think Steve and I are both psychiatrists don't run counter to our personal experiences and how we used to treat patients but it really does - it is surprisingly inconsistent with the pharmacomythology about how to treat depression. And so we do think that is data we continue to - this is just another step and we do think that these data though do inform what might come from SHORELINE. And if we can sustain this, we think the profile the drug will be unique. We think that the ability to get patients better more rapidly to have a tolerable side effect profile and to eliminate the necessity for automatic chronic pharmacotherapy will be in a really important treatment option for patients that otherwise are looking at years, potentially years of SSRI therapy. So we're very encouraged by it. And we intend to think about how we could disrupt the treatment from our paradigm, and that'll be of course, Mike's job once we have the data. But we do think these data are an important next step, where you're not seeing rebound, you're not seeing withdrawal, you're seeing very good - you're not seeing any sign, you're seeing really good durability. Now, the other thing I point out though is we've said early on that the thesis behind these drugs and the mechanism behind some of the neural stories is the ability to alter postsynaptic receptor trafficking. And we've always thought about restoring normal homeostatic mechanisms in the brain. And in that respect, we've always believed that zuranolone is a distinct [technical difficulty] it's not really what other people call an anti-depressant. It's something different. It's something that normalizes mood, potentially normalizes neural circuitry, and potentially offers a reset of mood function. So we think the six month data really represent this sort of paradigm shift and how one can think about major depressive disorder. So we do think that we're on the way to doing it. We think that this will be an important treatment option for patients and this one we intend to continue to pursue.

Thank you. I'd now like to turn the call back over to Jeff Jonas for closing remarks.

Well, again, thanks, everyone for joining us this morning. I know you're all busy, and I hope everyone's healthy and your families are healthy. To close, I just want to reiterate three important points. The team at SAGE has done a great job executing on our clinical programmers, all of which remain on track or ahead of schedule. As you've heard today, we have numerous catalysts over the next 18 months. And SAGE is really proud of our discovery in chemistry group. They are developing this really - what makes us unique, our rich pipeline of novel and alternatively develop clinical assets which we believe have the potential to help literally millions of people. So with that, I'm looking forward to updating all of you in the future with all of our milestones and hope all of you stay well and have a great day.

Ladies and gentlemen, this concludes today's conference call. Thank you for attending participating. You may now disconnect.