SAGE (2021 - Q2)

Good morning. Welcome to Sage Therapeutics Second Quarter 2021 Financial Results Conference Call. [Operator Instructions]. 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 expressed written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded. I would now like to introduce Jeff Boyle, Vice President, Investor Relations at Sage. Jeff Boy

Good morning, and thank you for joining Sage Therapeutics' second quarter 2021 financial results conference call. Before we begin, I encourage everyone to go to the Investor 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 Barry Greene, our Chief Executive Officer, who will provide an overview of accomplishments during the quarter and some general context. Barry will be joined by Steve Kanes, our Chief Medical Officer, who will review recent clinical progress; and Kimi Iguchi, our Chief Financial Officer, will review second quarter financials and discuss financial guidance. So with that, I'll turn the call over to Barry. Barry?

Thanks, Jeff, and thank you, everyone, for joining us this morning. We've made tremendous progress over the first half of the year on our mission to become the leader in brain health and a top-tier biopharmaceutical company by transforming the lives of patients with debilitating disorders of the brain and with 4 positive data readouts in the first half of the year and multiple potential catalysts pending in the coming months, we are demonstrating the Sage methodology is working while executing across all 3 of our franchises: depression, neuropsych and neurology. Innovation and drug development requires a flexible and thoughtful approach with the intention to provide the best patient impact and experience. Sage has been innovating since day 1 with a goal of delivering medicines that matter so people can get better sooner and stay better longer. I'll start the call by reviewing the progress made this quarter and our approach to supporting the millions of patients worldwide with brain health disorders who are in need of innovative medicines. I'll then turn the call over to Steve to review the clinical implications and potential importance to patients from our recent data readouts in more detail. Kimi will then provide an update on our financial progress during the quarter. In June, we announced positive top line data from the Phase III waterfall study of zuranolone in patients with major depressive disorders or MDD. The study met its primary endpoint, demonstrating a statistically significant and clinically meaningful reduction in depression symptoms as measured by HAM-D-17 compared to placebo after the standard 2-week treatment revenue. And as you've seen in all studies with zuranolone, in addition to day 15, a significant reduction in HAM-D scores began at the first measurement during treatment. That's in this case, day 3, and I'll remind you that after only 2 doses. Reductions were also seen at day 8 and day 12. Perhaps just as importantly, we saw a clear maintenance of effect through day 42, 4 weeks after treatment was stopped. These data further support our belief in the potential for a differentiated benefit risk profile for zuranolone as demonstrated in the clinical development program to date. And as we believe the millions of people suffering depression deserve a treatment option with a rapid and sustained reduction in MDD symptoms. Now thinking about the results from WATERFALL in the context of the entire landscape and Nest development programs, zuranolone has shown a remarkably consistent and differentiated profile. To date, 3 of 4 late-stage pivotal studies with zuranolone have been positive with HAM-D reductions from baseline after 2 weeks of oral treatment ranging from around 12 to 18 points. These results in the context of the overall benefit risk for an oral medication are unlike anything currently available or in development, and these data give us tremendous confidence in our belief of the regulatory path forward. Notably, in addition to our announcement of the top line data from the WATERFALL study, results from zuranolone with a positive Phase III ROBIN study in PPD were recently published in JAMA Psychiatry. It's a striking paper that I suggest you read. With WATERFALL data and the totality of the landscape in test program to date within Biogen are planning to discuss the potential NDA package and timing with the FDA. As we've said, we believe we have the efficacy data in hand to file the first NDA for zuranolone, and our goal is to provide an update later this year, including an update on potential timing of an NDA filing, if our discussions with the FDA aligned with our expectations. In addition to the ongoing clinical studies, we're also currently running clinical pharmacology studies at the 50-milligram dose needed for an NDA. At this time, after discussions with the agency, we do not believe the REDWOOD and RAINFOREST studies, which were suspended in early 2020, need to be completed for an anticipated NDA filing package. As you may recall, REDWOOD was designed to study fixed schedule intermediary dosing of zuranolone throughout the course of the year. We believe data from the SHORELINE study address this question. RAINFOREST was designed to investigate the efficacy and safety of zuranolone in co-morbid MDD and insomnia, while zuranolone has consistently improved sleep across clinical studies as measured by sleep component of the HAM-D scale, we do not believe RAINFOREST is required for initial filing. Real innovation has been absent in treatment for depression for decades. There have been more than 35 treatments approved over the last 30 years, with the benefit risk profile and approach to treatment have been largely unchanged and rates of depression continue to rise steeply. Despite the available treatments, there are still more than 19 million adults, who experienced at least 1 major depressive episode each year in the U.S. alone, with cases increasing every year. Additionally, there has been as high as a forward full increase in depressive symptoms during the COVID-19 pandemic. We firmly believe zuranolone has the potential to offer a unique and compelling profile, if approved, with clinical data to date showing clinically meaningful reductions in depressive symptoms with consistent improvements in mood, anxiety and sleep. Rapid onset, a 2-week treatment regimen that offers the potential to treat as needed with maintenance of response after treatment completed and a well-tolerated safety profile with no evidence of weight gain, sexual dysfunction, euphoria, GI upset or sleep disruption, symptoms that are typically the cause of treatment discontinuation with standard of care antidepression drugs. Together with Biogen, we're now taking the steps in building a best-in-class commercialization program for zuranolone to meet the needs of patients with depression, HCPs and payers. And if we're successful in our efforts to gain approval, we've illustrated this on Slides 19 and 20. As we focus on our goal to bring zuranolone to market, our commercialization work is imperative. We intend to revolutionize the way depression is thought about and treated. Current standard of care treatment for MDD can be slow for patients to experience response, if any, are chronic with most patients staying on some form of chronic treatment for at least 2 years and are often accompanied by burdensome side effects causing adherence issues and drug regimen changes. We believe the target profile for zuranolone with clinical trial data to date showing a rapid, clinically meaningful reduction in depressive symptoms, time-limited treatment regimen and well-tolerated safety profile will be welcomed by patients living with depression. The work to create a paradigm shift in the treatment of depression has started. We look forward to sharing more on our approach to engaging and educating key stakeholders as we ramp up our disease education and launch planning efforts for zuranolone. Now let me remind you that Sage has a deep pipeline of programs invented in-house, and we've made great progress in expanding and accelerating our pipeline during the quarter. Our neurology franchise is led by SAGE-324, which is also part of our collaboration with Biogen. And in April, we announced positive data from our Phase II kinetic study in essential tremor. In the study, SAGE-324 met the primary endpoint by demonstrating a statistically significant reduction from baseline in the TETRAS Item 4 upper limb tremor score at day 29 in the total study population compared to placebo. We also saw a statistically significant correlation between TETRA scores and activities of daily living at every time point. These observations are important as they may help provide future regulatory flexibility. For patients, essential tremor can affect nearly every aspect of day-to-day living and can make the simplest task difficult, if not impossible. We believe with pharmacologic characteristics of SAGE-324 are well suited to address unmet needs for these patients. We are progressing this program and expect to initiate a Phase II dose-ranging study in late 2021 and with the goal of optimizing the dose and frequency with a good tolerability profile and a dosing schedule to maintain plasma concentrations that translate into sustained tremor symptom control. Turning to our neuropsych franchise, we are evaluating SAGE-718, our wholly-owned first-in-class NMDA receptor PAM as a potential oral therapy for cognitive disorders associated with NMDA receptor dysfunction. In May, we announced positive data from Part A of the PARADIGM study on SAGE-718 in Parkinson's disease cognitive dysfunction. And I'm pleased to report that the first patient has been dosed in Part B of that study. We believe that this 4-week dosing arm will provide additional information about SAGE-718 to inform development path forward. Additionally, the luminary study with SAGE-718 in Alzheimer's disease, cognitive dysfunction, remains on track to read out later this year. And also later this year, we intend to initiate a randomized placebo-controlled Phase II study in Huntington's disease, which are positive, we expect will bring us 1 step closer in pursuing an initial regulatory indication for SAGE-718. As you can see, so far in 2021, we've executed on the promised expansion and acceleration across our growing portfolio. We look forward to providing more updates including additional analysis of previously reported data to allow stakeholders an opportunity to further assess the data in detail. That's all going to come in the second half of this year, and we expect to do a lot of education around those data. With that, I'll turn the call over to Steve for more detail on the data we reported this quarter as well as our additional ongoing clinical programs. Steve?

Thanks, Barry, and good morning, everyone. I'm thrilled with the data we've generated to date and the progress across all 3 franchises throughout 2021. Starting with our depression franchise led by zuranolone, our next-generation positive allosteric modulator of GABA A receptors we've seen remarkably consistent and differentiated data with zuranolone throughout the landscape and NEST clinical development programs that was further supported most recently by the positive outcome in the pivotal waterfall study. And as Barry mentioned, we believe the data we've generated to date, along with the ongoing pharmacology studies and safety data from Coral supporting submit anything mineralogy to specifically discuss these data and the regulatory NDA filing pathway. In the WATERFALL study, zuranolone met the primary endpoint, demonstrating a statistically significant and clinically meaningful improvement compared to placebo and HAM-D scores at the end of the 2-week dosing period. We also saw a rapid onset of activity beginning at day 3, the earliest time point measured. As a group, patients who responded to zuranolone after 2 weeks of treatment retained on average more than 85% of their improvement through the end of the trial. In this case, a full 30 days after the last dose of medication with the majority of these patients maintaining most, if not all, of the improvement. As we continue to analyze the data from this study and the entire landscape program, we look forward to presenting additional data pertaining to the overall profile of zuranolone along with the patient-reported outcomes that speak to the potentially paradigm-changing profile that zuranolone may present for patients if we're successful. What I can say is that the data to date tell us that zuranolone has shown rapid onset, large improvements in overall depressive symptoms prolonged benefit after completing the 2-week treatment regimen and a well-tolerated safety profile. For example, in the SHORELINE study, the largest naturalistic study conducted in an MDD development program even see that nearly 50% of patients, who responded to 30 milligrams, only required 1 treatment in a 12-month period and roughly 70% of patients responded to 30 milligrams required no more than 22 treatments throughout the year. And as a psychiatrist, I believe patients are looking for rapid and sustained reductions in their depressive symptoms with the confidence that it is a treatment only when needed. The safety profile of zuranlone has now been characterized in more than 3,500 patients, and the data from the waterfall study is consistent with this large and growing safety database. For example, on the waterfall study, the vast majority of adverse events were mild to moderate in severity, while most importantly, there were no deaths or a loss of consciousness. There were also no reports of weight gain, the sexual dysfunction, no euphoria, all of which can be associated with current standard of care antidepressants and can lead to discontinuation. To that end, importantly, very few patients discontinued from the study because of adverse events, with 3.4% of those receiving zuranolone and 1.5% on placebo discontinuing because of TEAEs. There were only 2 serious adverse events in the zuranolone group and 2 in the placebo group. As we continue to review the substantial amount of data from the WATERFALL study and the rest of the landscape program, we're also committed to sharing data at premier scientific forums as quickly as possible. Slide 14, and our corporate presentation provides details on the types of data we plan to present at upcoming congresses, including patient-reported outcomes, which we believe will be very insightful. The totality of the data seen with zuranlone to date supports our view of its target profile as a rapid durable and use as needed or episodic treatment that we believe has the potential to be meaningful for patients and our health care system overall. Recent health economics and outcomes research conducted by Sage and published in the peer-reviewed journal pharmacoeconomics showed that the economic burden of MDD treatment with multiple lines of treatment for depression was much higher compared to a single line of treatment for depression. In fact, there was an increased economic burden associated with delay of depressive episode resolution as early as the second line compared to the first line in MDD. It's clear that a rapid acting well-tolerated episodic treatment for depression is needed, and we believe zuranolone has the potential to fill that void in the market, turning to the 3 additional ongoing Phase III studies with zuranolone. The CORAL and SHORELINE studies are on track to read out with data in late 2021. CORAL is investigating the efficacy and safety of zuranolone 50 milligrams when co-initiated with new open-label SSRI in patients with MDD. The positive results from the waterfall study, we believe, have sufficient efficacy data to support our first FDA filing for zuranolone, although a consistent safety profile remains an important aspect of CORAL. That said, of course, we expect to see consistent efficacy profile supporting the differentiated benefit risk of zuranolone in this trial, including rapid onset of effect. Shoreline is designed as a naturalistic open label safety and tolerability study to investigate as needed repeat treatment with zuranolone over a 1-year period in patients with MDD. We expect to report a top line data cut from the 50-milligram 1-year cohort in SHORELINE in late 2021. We're also continuing to enroll patients in the study following our announcement last quarter that we expanded the target enrollment to 500 patients and we're offering patients from the CORAL study, the ability to roll over into SHORELINE following the completion of the CORAL study. The other ongoing Phase III study of zuranolone is the SKYLARK study in postpartum depression. We're updating our guidance on the SKYLARK study, which is now expected to read out in mid-2022 as a result of a slower-than-anticipated pace of enrollment in the study due to a dramatically an unfortunate lower level of women diagnosed with PPD during the pandemic, possibly preventing women from accessing appropriate screening and diagnosis. Also in our depression franchise, today, we announced the top line data from the Chickadee study evaluating the safety and tolerability and pharmacokinetics of ZULRESSO in adolescent females aged 15 to 17 with postpartum depression. This study was conducted as a post-marketing requirement to investigate ZULRESSO in adolescent females with PPD. The data showed that the safety and pharmacokinetic profile for ZULRESSO in this population was consistent with prior studies and adults and the FDA approved product label. Importantly, the efficacy seen in Chickadee study is consistent with what we've seen in the clinical program in adults. We plan on working with FDA to potentially add this broader age group to the label. Moving to our neurology franchise, which is led by SAGE-324, a novel treatment that we believe has incredible potential in the treatment of essential tremor. The data we announced in April for the kinetic study, a 36% reduction in upper tremor amplitude from baseline to day 29 in the total study population seen with SAGE-324 and with adverse events that were generally consistent with the safety profile of 324 seen previously, are supportive of further development in the target product profile for 324 may potentially be very meaningful for patients. To that end, we plan to initiate a dose-ranging Phase II clinical trial in SAGE-324 in essential tremor in late 2021. We also look forward to working with our collaborators at Biogen to optimize next steps for the continued development of SAGE-324 to identify the profile we expect to move into pivotal trials. As a reminder, at this time, we don't believe additional formulation work is necessary for SAGE-324. Our confident our proposed Phase IIb trial will result in a dose and frequency designed to optimize benefit/risk as we continue to develop this novel product candidate for essential tremor. Beyond SAGE-324, our neurology franchise includes SAGE-689, a potent product candidate with rapid PK and solid formulation flexibility with potential in areas of high unmet need, including acute agitation, mania or migraine. I'm pleased to share that the first patient has been dosed in the Phase I program for SAGE-689, and we're on track to complete the Phase I SAD study in late 2021. Additionally, I'm pleased to share that IND-enabling preclinical work is underway for SAGE-319 and oral extrasynaptic GABA A receptor preferring PAM. The advancement of the SAGE-689 and SAGE-319 programs represents meaningful expansion and acceleration of our Sage developed wholly owned pipeline. Turning to our neuropsychiatry franchise, where we are continuing to develop SAGE-718, our NMDA receptor PAM in development as a potential oral therapy for disorders where cognition is 1 of the main drivers of disability. Consistent with the data seen in Huntington's disease patients in our Phase I studies in patients with Parkinson's disease save 718 is shown in an open-label Phase II trial, the PARADIGM study, a positive impact on multiple domains of cognition, including executive function and learning and memory while not altering simple attention or reaction time. In the study, patients aged 50 to 75 years old with mild cognitive impairment due to Parkinson's disease to receive SAGE-718 3 milligrams daily for 2 weeks demonstrated improved performance from baseline on multiple tests of executive functioning over 14 days of treatment. To our knowledge, there is nothing in clinical development that has generated data suggesting this kind of profile potential ability to augment key cognitive domains without the challenges often associated with other approaches. Within the safety data available, the rates of adverse events reported have been low with the most frequently reported AE being headache. No serious adverse events have been recorded to date. We're confident in the potential of SAGE-718 and today announced that we have dosed the first patient in a 4-week dosing arm in the PARADIGM study to gather additional data in the PD patient population and inform next steps. As we previously announced, we are planning to initiate a double-blind, placebo-controlled Phase II study of SAGE-718 in Huntington's disease later this year and are on track to report top line data from the luminary study evaluating SAGE-718 in patients with AD mild cognitive impairment and mild dementia later this year as well. In addition to SAGE-718, our neuropsych franchise also includes SAGE-904 and an NMDA receptor PAM product candidate being evaluated as a potential oral therapy for other disorders associated with NMDA hypofunction, where we're on track to complete SAD and MAD studies in late 2021. Neuropsych franchise also includes SAGE-421, an oral NMDA PAM being evaluated for potential use in neurodevelopmental disorders and cognitive recovery and rehabilitation, which we expect to advance to preclinical studies this year. Lastly, Today, we announced that we're terminating our Phase III study evaluating brexanolone and COVID-19-related acute respiratory distress syndrome, or ARDS. The study did not meet enrollment expectations and was closed to further enrollment this quarter. we will report the data collected to date after full analysis of the results. This was an important quarter for Sage marked by advancements across our pipeline, and we're excited about the second half of the year with several potential value-creating catalysts expected. We believe our significant progress this quarter leaves us well positioned to build on our momentum and to advance our mission of making medicines that matter. I'll now turn the call over to Kimi for a review of the financials. Kimi?

Thanks, Steve. As you heard from Steve and Barry, we're executing well in 2021 and are making decisions based on data that we believe will ultimately help us deliver medicines that positively impact patients. It's an exciting time for Sage, and we're expanding and moving our pipeline forward from a position of strength, underpinned by our strong financial position. Let me start with the highlights from our second quarter financials and then close with some commentary on our financial guidance. We recorded $1.6 million in net revenue in the second quarter from the sales of ZULRESSO. That compares to $1.1 million of revenue from sales of ZULRESSO for the same period in 2020. We remain committed to our moms, their families and all those impacted by PPD. Our targeted commercial efforts, including an integrated approach to engaging key stakeholders our intel moms with PPD who may benefit from treatment with ZULRESSO gain access. Selling, general and administrative expenses were $43.3 million in the second quarter compared to $38.2 million for the same period of 2020. This includes an increase in expenses of $8.6 million and a reduction in expenses of $3.5 million due to reimbursement from Biogen as part of our collaboration. The increase in expenses was driven by an increase in activities focused on disease awareness, increased launch readiness activities for a potential product launch if our zuranolone development efforts are successful and noncash stock-based compensation expense from the achievement of a milestone for certain outstanding performance restricted stock units. Research and development expenses were $66.2 million in the second quarter. That was compared to $73.3 million for the same period of 2020. This reflects an increase in expenses of $13 million and a reduction in expenses of $20.1 million due to reimbursement from Biogen as part of our collaboration. The increase in expenses was driven by clinical pharmacology studies that began in 2021 and noncash stock-based compensation expense from the achievement of milestones for certain outstanding performance restricted stocking. Additionally, we had no restructuring expenses in the second quarter of 2021 compared to $28.4 million in the second quarter of 2020. We reported a net loss of $107.2 million for the second quarter. That was compared to a net loss of $136.3 million for the comparable period of 2020. I'd like to highlight the components that we expect will continue to support and build our financial strength for the remainder of 2021 and beyond. Specifically, there are 3 areas that give me confidence in our financial strength and our potential to create value. First, we expect our cash on hand of $1.9 billion plus ongoing funding and resources from the Biogen collaboration will provide the financial flexibility to allow us to continue to make sound and strategic decisions designed to improve our probability of success. The Biogen collaboration provides ongoing cost sharing for R&D and SG&A expenses for agreed upon activities related to zuranolone and SAGE-324. And we have the potential for up to $1.6 billion if we meet development of commercial milestone. Second, our thoughtful and flexible R&D approach combined with our strategy to invest in near, mid and long term has led to a portfolio of multiple programs across 3 franchises, all of which have shown promising signs of long-term value potential for patients and shareholders. And third, we're working to build a best-in-class commercialization program designed to help us address patients, HCPs and payers if our products are approved and with the potential, if we're successful, to deliver significant shareholder value. Separately, we are reiterating our prior financial guidance that we expect to have a cash balance of more than $1.7 billion at the end of 2021, and as a reminder, we did not expect to receive any milestone payments from collaborations for the remainder of 2021. It's thrilling to see what has been achieved to date, and we're just getting started. I'm confident that our strong financial position and flexibility will allow us to continue to drive the portfolio expansion as we work to develop innovative treatments with the potential to impact millions of lives. I'll now turn it over to Jeff to handle Q&A with the operator. Jeff?

Thanks, Kimi. Before I turn it over to the operator, I'll ask that you limit yourself to 1 question. If you have an additional question, feel free to return to the queue. Now I'll turn it over to the operator. Operator?

[Operator Instructions]. Our first question or comment comes from the line of Ritu Baral from Cowen.

This is Waylon for Ritu. Congrats on the quarter. And maybe just to go back to the regulatory strategy, just to clarify, do you need oral to be successful to file an MDD and in the decision to terminate REDWOOD and RAINFOREST, does that mean the FDA had indicated that SHORELINE would provide sufficient retreatment data for the filing?

Yes. Thanks for the question. So as we said on the call, we have sufficient efficacy data for filing. We take a step back. We've studied zuranolone in over 3,500 patients and subjects to date. And the profile of zuranolone has been consistent. We've seen a rapid onset of action efficacy as early as the first measured time point in day 3. That's been consistent with day 8, 12 and 15 significant clinical results. So we believe the totality of the efficacy data is filed. As we mentioned in the call, we have ongoing pharmacology studies, which also needs to be complete. And then we believe and we need to confirm this definitively with the agency that will take a snapshot of the safety data from all ongoing other clinical studies, including CORAL, and that package in totality will be sufficient for filing. We did - and we had breakthrough status, so we're an ongoing dialogue. And we were able to confirm REDWOOD and RAINFOREST would not be required for this filing. And then to your specific question with SHORELINE, we saw a really important data with SHORELINE. As Steve mentioned on the call, 50% of the patients in SHORELINE and that was the 30-milligram dose required 1- and 2-week treatment in the entire course of the year and 70% of patients only reported 1 or 2 treatments in the entire course of the year. And then about 10% requires 3, 10 4 and 10 5. So even at the most frequently study dose of 5, 2 treatments, we're talking about 10 weeks of drug versus 52 weeks recurrent antidepressants. So we believe that those data are efficient to provide the retreatment evidence. Steve, anything to add? Steve?

Yes. No, the only thing I'd say is with a big important factor of all of these for filing is making sure we have an appropriate safety database. And now with more than 3,500 individuals dosed in hand and a very clear safety profile along with 3 positive trials, which includes WATERFALL, we believe, that we definitely have the efficacy as well as the safety information necessary for a file. And as a said, we'll confirm that with our next meeting with the agency.

Our next question or comment comes from the line of Salveen Richter from Goldman Sachs.

This is Elizabeth on for Salveen. I'm just wondering if there are any additional steps that need to be taken ahead of the Phase II dose-ranging study for 324?

Yes. And really important that you mentioned that. So taking a step back, we started the year articulating to everybody that our intention is here based upon our strength and balance sheet, which will stand and accelerate the pipeline. And the positive kinetic data, we were - where we were asking the question, can we treat essential tremor patients throughout the course of 30 days and see consistent reduction in essential tremor with a favorable safety profile without any kind of tachyphylaxis or untoward safety. And that's exactly the result we had which gives us confidence to move into a longer-term study to sense tremor. So together with our partners adviser, we were designed that next step dose frequency study, where we hope to come out with a dose of frequency that provides a profile to move into Phase III. So all we do is we've agreed with Biogen. Now we have to work with the agency to make sure that we have the right frequency. And we plan on issuing that later this year, and we will provide guidance and design details once we've initiated that study. So we're moving forward happen

Next question or comment comes from the line of Cory Kasimov from JPMorgan.

This is Doug on for Cory. We're just curious about investor feedback that you've gathered since the top line WATERFALL readout? And what aspects of the data, if any, really stand out to the KOLs?

Yes. Thanks for that question. So since we've had the waterfall readout, we've integrated that with the totality of data and had great discussions with various investigators and KOLs. And I think what everybody is seeing is really a paradigm shift here. When we think about the last 35 to 50 years of antidepressants, when we think about what's in development today, including some later-stage programs. Nobody is seeing an oral medicine that works after 1 or 2 doses. And as you know, we've seen statistical significance at day 3 with continued efficacy. And I'll ask Steve to talk about the totality of data, and what we see in SHORELINE to help emphasize that point.

Yes. The profile itself is really unique. We talk a lot about the paradigm shift, but I'll just remind everybody that what we mean is something really substantial for patients. The typical treatment duration for a first episode for depression 6 months, typically, people are on their antidepressants for years. And what we're offering we're successful is a time-limited treatment 14 days, 2 weeks of therapy to treat a major depressive episode. That is a real revolution, it's something that patients as well as physicians are looking for. The kinds of things that we're now working with is really integrating the data to be able to illustrate the overall benefit risk profile and working specifically with all of the KOLs that we're in touch with, to both make sure they understand exactly what we're trying to do and then getting their feedback about how best to articulate that benefit risk profile. What we've seen so far is that most patients require no more than 2 treatments over the course of a year. That's more weeks, and where 48 weeks in the year, they are not taking medication, a real revolution in the treatment of depression one that patients themselves are really quite interested in. So the kind of things that we're looking to more deeply into are 1 of the patients' views of this treatment. How does that reflect in the overall outcome, something that's very important in demonstrating clinical meaningfulness? And using that with our - with KOLs and everybody else to really help everyone understand how this may be used in the treatment paradigm. It's going to be a very welcome new tool approved, and how best to then introduce it into clinical practice. So it's exciting for me because this is something that's entirely new. If I - and I've been seeing the data for years now, if I had this medicine in my armamentarium when I was in practice, I would have used it on everybody and finding ways to sort of educate and then ultimately, change practice is kind of where we are right now, it's a really exciting opportunity.

Our next question or comment comes from the line of Paul Matteis from Stifel.

I just wanted to clarify 1 thing and then ask 1 quick question after that. But - on your comments, Barry, is there a scenario here where you could initiate and complete an NDA filing for zuranolone before we ever get the CORAL data? Just trying to understand if that's one of the possible permutations. And then can you just remind us where you are on abuse liability work for zuranolone and kind of what your operating expectation is as you approach a regulatory review.

Yes, Paul, thanks for the question. And I'll - let me provide context and that Steve to fill it in. So what we said is that the efficacy data we have to date, 3 out of 4 positive Phase III including the data from Shoreline, are sufficient for an efficacy filing. We have ongoing to your point with ongoing pharmacology studies. We did run the pharmacology studies at 30 milligrams, but changing to now the 50-milligram data from earlier Phase III learnings were rerunning many of the pharmacology studies, including abuse studies as you happen. Those will be completed later this year. So those data will be part of the filing. In terms of other studies, CORAL and SKYLARK, we believe and we need to confirm this with the agency that a blinded snapshot of the safety data will be required to file. So it's conceivable that we are following the regulatory tax before other Phase III readout, but that's simply a matter of timing. Steve, anything to add?

No, you asked specifically about whether or not the clinical package is complete, and there are some ongoing say, as Barry said, that's at 50 milligrams. Obviously, for any drug that gets into the CNS, there's an abuse liability package that you do. We'll certainly have it in time for the filing and there's nothing there that's giving us pause. We expect that we'll have all of the data that we need to file at the time of completion after our meeting with the FDA. As Barry said, with the efficacy data as well as the safety data, it's really just a matter of the technical aspects of what goes into a filing that we need to sort of agree on.

Our next question or comment comes from the line of Tazeen Ahmad from Bank of America. Mr. Ahmad, you may need to unmute your phone.

Sorry about that. Can you hear me now?

Yes.

Okay, great. One question that I have about the discontinued RAINFOREST study. One thing that was being studied there, of course, was co-morbid insomnia. And by the time that we've looked at this drug. One of the major benefits that physician checks have given us is that the ability of patients to be able to sleep better at night would be a big positive and would increase their desire to want to prescribe zuranolone. And so now that you've discontinued that study, I'm just curious, how would we get a little bit more color on the ability to help fleet structure? And is that still something that you would want to have language in an ultimate label?

That's a great question. So I will remind you that through the MD scores and the patient reported outcomes in the completed clinical studies, we have insight into not only mood in anxiety, but sleep and sleep architecture. And we believe that we have data sufficient in understanding that patients' sleep patterns have been improved. Now obviously, label negotiations and exactly what the label is a matter of FDA negotiation. But we believe that we have those data. If we believe after we get the label that ongoing studies are required to make more definitive savings, we certainly can do studies. But we think we've got data in hand that helps us understand that patients are, in fact, and many of these patients, as you know, on sleeping. The patients are, in fact, sleeping better. Steve, anything to add?

Yes. Tazeen, like you, we remain interested in the potential benefits of sleep. And how to get at that is something that we'll be looking into. Certainly, we've seen consistently when we look at the individual factors that sleep has improved, not only sleep, of course, we're seeing improvements in the core symptoms of depression and so forth, which is what you need to be an antidepressant, but sleep is certainly a factor there and one that we think is going to be important as a benefit for patients. How we get to that, first, focus on depression, get the drug approved, something that's absolutely important during a green health pandemic where the rates of depression are going up through the roof. And as we become successful, we'll be able to take another look at that. But certainly from a scientific data, data communication, we'll be able to say words about that. Obviously, we've done a lot of sleep work already. And then through the individual factors from our trials, we'll be able to articulate those benefits. And those are some of the things that we're planning on doing near term, how do you address that long term is something that obviously we're working out with Biogen as we move forward.

Our next question or comment comes from the line of Yasmeen Rahimi from Piper Sandler.

I have questions on SHORELINE. The first one is, can you tell me how many patients on the 50-milligram dose group will have 1 year completed for the data late this year? And then two, when you look so far, is the rate of recourse or needing a second dose, the same in the 50-milligram versus the 30-milligram dose that you have reported?

Yes, yes. Thanks for the question, and thanks for asking about Sterling. This is a really important study that helps us understand the incredible durability that we're seeing in patients. And keep in mind that, and people have to reflect on this, patients are taking drug for 2 weeks. And as we've seen in our Phase IIIs, the 4 weeks or more after dose, patients are still reporting that they're at in normative stage insuring further reflects the durability of the drug. I'm going to turn it over to Steve to get into the details, but very important in the context of zuranolone.

Yes. The short answer, of course, is we'll know the actual number when the study is completed. And so we're following that. And the goal is to have as many patients as we can at the end of the study and to continue to roll the patients in. In fact, we're rolling patients for the CORAL study into the trial. And what you do with long-term trials like this is take cuts along the way. What I can tell you is we're seeing very remarkable results in terms of response and remission in the SHORELINE study during those initial 50-milligram doses. And that's been so since the earliest cuts. So our estimates now are that 80% plus of patients are showing a response, meaning a 50% reduction and about 43% a little bit more are showing full remission. And those have been rock solid since the earliest days of our program. They're notably higher than what we saw at 30 milligrams, but in the same general range. So we're seeing really good response that's been continuing both for first the 30 milligrams and now throughout the 50-milligram dosing, we'll have the actual metrics and numbers when the study completes.

Steve, are you able to comment on as of right now, the size of SHORELINE, just like how many patients are currently in SHORELINE?

I can say that this is the last data cut, there was more than 500 patients enrolled in the trial. And this would be the equivalent of a long-term safety study where we expect attrition throughout the year. People are getting better. They're going about their business. They don't necessarily are interested, especially if they're feeling well to continue to check in. So even the rates of attrition in the trial are things that we look at. But what we're seeing is very high levels of retention One of the points we'd like to make is not only in SHORELINE our patients getting better, but only a small number of them are requiring additional retreatments. This is - this would be the equivalent of a reverse placebo effect, meaning patients know they're not on therapy and only a fraction of them require additional treatments. And so among other things, we get - we start to understand what treatment in the real world would look like with our medicine and on treatment, but half of all patients only required that index treatment another 20% required and one more treatment in the course of a year. That's fundamental data. You're not going to find that in the literature, and this is part of what we're doing, creating both a new approach to treatment as well as the foundational data that's necessary in order to make live treatment choices. So that's why Shoreline is so important. And there's a lot there, but those are - from my perspective, those are the things that are really most important as this program progresses.

Our next question comes from the line of Andrew Sai from Jefferies.

So my question is on CORAL. As investors start to think about the likelihood of success in what the study could show at day 15. Is it fair for us to assume the comparator arm, which is the typical SSRI could essentially be viewed as a traditional placebo arm since takes 6 to 8 weeks to work, or does co-initiating within SSR still somehow change the calculus? And then a corollary to that is that as we think about day 42, could both arms improve on HAMD SSRI start to kick in for some patients.

Yes, Andrew, thanks for that question. I'm going to ask Steve to talk about our ZULRESSO experience out to multiple, and I'll answer that question for an improved drug. But let me say that CORAL, as you highlighted, is ask me an important question. What happens when we co-administer an antidepressant with patients with zuranolone. And the data we have to date have patients on 1 of the advantages. These are not patients that you assume experienced some of the horrific side effects that you might antidepressant. So we're asking a different question, and we should learn from CORAL. Now I'll also say that as states has done each and every time, when we conduct clinical studies, we learn from those clinical studies, and we make adjustments to future studies based on these learnings. So if there's adjustments to be made to CORAL, we will make those adjustments and work with the agency on any necessary adjustments. But to your specific point, you're right. We do not expect that the antidepressant alone will confer any beneficial - any benefits for 4 to 6 weeks. But we may, in fact, see side effects earlier, and that will be very interesting to date because as Steve highlighted earlier, while we have seen somnolent and sleepiness with zuranolone, we have not seen things like weight gain, sexual dysfunction, GI upset and some of the other side effects you see with antidepressants. So hopefully, that's helpful. And then Steve, maybe you can talk about how arms might come together in multiple weeks of dosing in patients on another drug.

Absolutely. The - we don't contest that antidepressants when given over the course of several weeks may actually demonstrate benefit. And just like in our other clinical trials, we do know that patients over time may improve even in the placebo arm. So we're not looking as we haven't for placebo drug differences out through Day 42, especially not in CORAL. This study is looking to address a very particular use case, which is how do you jump start therapy when you co-initiate an antidepressant with SAGE-217 zuranolone with an antidepressant. In oncology, they called an induction with maintenance. How do you start people to get better more quickly? And so we're looking at those early time points they have shown consistent differentiation from placebo or any other drug that's available at day 3, day 8, day 12, the 15 really early on. Are there nonspecific effect that we need out? Of course. I mean we do that through the powering. We do that through the contact with the trial and so forth. But we do think that if the study is successful, just yet another use case where patients may or physicians may want to choose this as a treatment option. And the technicalities of it, are obvious, we plan for success and we ensure that the powering is adequate to show those differences.

Our next question comment comes from the line of Laura Chico from Wedbush.

I have one on zuranolone and PPD. So the Phase III JAMA paper shows a higher proportion of patients with symptom onset during the third trimester versus the ZULRESSO studies. And it seems like a bit of a shift in diagnosis, but not much time will lapse between when the zuranolone PPD and ZULRESSO PPD studies were conducted. So with SKYLARK pushing back, I'm just wondering if you can comment on whether you think these are more permanent changes in the PPD landscape. It's interesting because you're seeing elevated depression rates elsewhere, but not in postpartum depression. So I guess the question here is how does this impact, one, on your PPD submission strategy, but then also how do you see this playing out in a commercial environment in terms of maybe who might be the primary point of care for zuranolone?

Yes. Laura, thank you. A few different questions in there. So let me try to unwind it and get some help from Steve here. So thank you for highlighting the paper. We're really proud of the ROBIN study, and as I highlighted in my prepared remarks, just a beautiful paper and a paper that really reflects just how well zuranolone works in these moms with PPD. Let me start with the kind of the commercial landscape. So if we're fortunate with our successful waterfall to file, as we expect for the agency and get an indication for both MDD and PPD, which is what we expect. We will be reaching out and making sure that all moms, particularly those with risk factors have a plan. And every mom, as you know, has a plan for when her water breaks, she knows where her bag is, who's taking her in, who her physician is going to be, where she's giving birth. But almost no moms have a plan for being depressed a week, 2 months, 3 months after the baby is born. So we're going to make sure that we work with patient advocates, who work with OB/GYNs, who work with psychiatry community to ensure that all moms have a plan after giving birth. That is probably broader than just presses there's other health concerns that moms have after giving birth. So we will be aggressive in ensuring that moms and depression have access to zuranolone. We heard some 2 KOLs I can say that with certain models and risk factors, they intend for those moms to actually leave the hospital with a scripted hand in case depressive symptoms come up. So I think we'll be well prepared there. Steve, do you want to talk about the timing differences that Laura highlighted?

Oh, sure. So Laura, I'm glad you did the close reading we've always included patients that had an onset during fair trimester. So we think there are a few things that are going on. One of them is with the approval of ZULRESSO, there's a heightened awareness among treaters both to identify and diagnose patients. And that, I believe, is being reflected in the ability to at least identify patients prior to being treated Importantly, we are not enrolling patients in the study, despite when their diagnosis was made until a full month after the delivery, that's to ensure that we're not medicalizing sort of the normal changes in mood immediately after delivery. I mean people have to have their onset of symptoms and they have to be maintained for several weeks, 4 weeks plus for them to really be appropriate for a diagnosis of MDD and that's really important for us. I mean unless those symptoms remain, they're not MDD. So we think there's awareness, screening, attention and a bit of know-how on how to identify these patients, and that's important. With regard to the epidemiology, well, we know a few things. One, rates of depression, if you just ask people their way up. We also know their births are down, and we also surmised based on discussions with investigators and KOLs that new moms are much more reluctant to come into care during the pandemic. So all of those factors taken together speak to, one, the importance of a portable treatment to modern treatment, time-limited treatment that doesn't require people coming into a center as well as the ongoing work related to the SKYLARK study. So as much as it's disappointing to change the time line, the importance of the work remains and we're really looking forward to getting that study over the finish line. I would also add as part of our filing strategy, we do intend to discuss the utility of our current package for getting both an MDD and PPD label. So all of that is part of our current approach based on the outcomes from the JAMA Psychiatry paper on the site.

Our next question or comment comes from the line of Jay Olson from Oppenheimer.

Appreciate the importance of a rapid response in MDD, which you described earlier. Can you talk about how an early response correlates with positive longer-term outcomes in MDD? And also comment on how the onset of response for zuranolone compares to other novel antidepressants, such as esketamine?

Yes, Jay, thanks for the question. And I really thank you for highlighting a really important point. So what we know about MDD, and there's been many studies from us and others is that the earlier you diagnose and the more rapidly you get people better, the better the longer-term outcomes for depression and other comorbidities, such as cardiovascular disease, and diabetes. And there's literature for many that talked about the downstream effects of not treating a person impression rapidly get them better faster. Steve, would you talk - want to talk about esketamine and some of the health economic data that's out there about not treating people or benefits of treating people early and getting them better faster.

Yes. I mean the most important thing, I mean, let's start with patients first. Everyone wants to get better quickly. That's kind of the goal of all medicine. There's a few things we know with depression though, which is the more quickly someone gets better, the more likely they are to maintain those benefits regardless of what the treatment is. So when we lean into getting patients better with a 2-week course of therapy, that very much builds on a well-described phenomenon, which is get people better quickly, and we know that we're going to be able to get them back into their life their role functioning and be able to begin that journey of true recovery, right? I mean we think there's 1 thing to have symptomatic improvement. It's another to have an improvement in your role functioning and really looking at what that looks like for patients and from patient-reported outcomes is something that's really important for us. So those impacts are ones that we're really in to get out into the real world, both from the WATERFALL study, but more importantly, from landscape. With regard to other drugs, including esketamine, while there are reports of very early onset, the real statistical significant differences in this drug is really after multiple, multiple treatments. I would also point out that in Spravato esketamine, they're sending a very different patient population important one, which is treatment-resistant depression. Our program is focusing on what I would sometimes refer to as garden variety of depression patients who don't necessarily have multiple, multiple and very severe episodes but still deserve the opportunity to get better and get back on with their lives. So we're seeing faster onset as early as day 3. We're seeing maintained benefit after a time-limited therapy 2 weeks and a really positive benefit risk profile. We think this is something that when it's approved, we really revolutionized the treatment for many people. I'd only add that with greater than 30 drugs approved in the United States for there are still upwards of 19 million people a year that have made a depressive episode. So as much as people view this as something that's relatively straightforward to treat, the unmet need is enormous. And we think everybody deserves to get better quickly and get back on their feet.

And Jay and all the data out there support what Steve just said. We know that patients that have recurring depression that are treated on multiple medicines and stay depressed for long periods of time, go on to develop diabetes, go on to develop cardiovascular disease and other comorbidities, which not only hurt that individual but a cost of the whole health care system. And we were listening to one of the Wall Street analysts on a panel of CORAL, where KOL said, these data are remarkable. I'm going to give them to my patients that I need to get better faster. And when asked, well, which patients don't need to get better faster, that physician was a bit dumbfounded. So everybody ear to get better faster.

Our next question or comment comes from the line of Sumant Kulkarni from Canaccord.

We've seen the durability and response data within potential real-world usage of the run alone, is there anything particularly from a safety perspective that might limit an immediate second 14-day course of therapy if that's required. I guess asked another way, this goes back to why a 14-day period was chosen in the first place and what's the longest continuous safe use period for zuranolone might be from a regulatory perspective?

Yes. Let me start and then ask Steve to comment. So the science behind zuranolone was a belief set that in depression, we can - by targeting positive analytic modular gave that we can reset patients to kind of normative state, kind of rewire the brain architecture. So the release that's going on is it's going to be a short duration therapy and not a chronotherapy. That's the paradigm shift we're talking about here. So what we've seen now are patients treated for 2 weeks to get better faster. And the Shoreline data provided thus far about how often retreatment is required. So we have top studies that have animals on for longer term without other filters effect. But the adverse event profile has been consistent, in fact, improves over time as patients are retreated. So we think of this as kind of as a treat as needed therapy. And Steve mentioned this earlier on the call, this is very important. When patients often go off antidepressants, typical antidepressants and they're off drug. They know they're off drug and they seek to get back on growth. With the SHORELINE data, we have patients off drug and Steve highlighted this earlier, and they state that so they're not seeking to get back on drug even though they're off drugs. So we believe that as patients need the 2-week therapy, they'll be able to get additional 2-week therapies kind of in the real world. Steve, anything to add?

Yes. Just to speak specifically to your question, there is - I can't - obviously, we don't have a label yet. We've been saying TV therapy because when we do the modeling, and I know we've talked about this before, most of the improvement happens within the first week. By the end of 2 weeks, we're really starting to show some incremental improvements, but really, patients are doing well. And of course, these are really - I just want to point this out, and you guys can go into your research, but these are remarkable data. We're seeing 80% responses, somewhere between 40% and 50% remission, you're not seeing that with any drug, let alone after a limited course of therapy. And so for us, this is really transformative. And part of what was so exciting about the program when we were getting started is the opportunity to then use these data to think differently about a treatment paradigm, which addresses patients' needs, who want to get better and not necessarily keep taking medication forever. So assuming the drug is approved, we'll - we could potentially think about other kinds of dosing schemes. This already is really important, and we've seen it very consistent in terms of acute it's consistent in terms of safety in study after study after study. And it's, quite frankly, the time limited aspect of this is what got the FDA's attention is why we have a breakthrough in the first place. It's a concept that I think will really add something unique to the treatment toolbox for patients with depression.

[Operator Instructions]. Our final question comes from the line of Gary Nachman from BMO Capital Markets.

This is Edmond going in for Gary Nachman. I just had a quick question. So for SAGE-689 and SAGE-904 programs, are there any specific or potential indications you would be looking to target? Some color around that would be great.

Yes. Thanks for the question. Steve, do you want to take that?

Sure. For 904, we're obviously - we usually start at the highest level. We look for disorders where there's known or suspected NMDA hypofunction and for 718, we're looking at neurodegenerative disorders. For we think this may very well be beneficial for neurodevelopmental disorders, whether that be autism or schizophrenia or other places or other disorders where there's cognitive where there's cognitive impairment in executive function deficits, a little bit different from neurodegeneration. So those are areas that we're looking at. And as we understand more about the drug, we'll be more specific. For 689, this is a rapid onset parenteral drug. It's injectable now it can be formulated in lots of ways. So we're looking at places where rapid onset of GABA-positive modulation be very will be helpful. So the kinds of things we've talked about are, say, agitation where we know there remains an unmet need whether it be in emergency settings or for people with severe dementia, Likewise, there is potential interest in areas like severe migraine or other places where people may come in who are in the very rapid responses. So a lot is going to be driven by the results of the Phase I and where we are in terms of our benefit risk. But we're looking to identify differentiated molecules and then develop them in very different ways than the molecules we have already.

At this time, I'd like to turn the conference back over to Mr. Barry Green for any closing remarks.

Thank you, and thanks, everyone, for joining us this morning. I'm thrilled with the substantial progress we've made in the first half of 2021 with several milestones achieved on our mission to become the leader in brain now. As you all know, this is a serious business. For example, a recent study noted that up to 31% of people with MDD have attempted suicide, and our depression, neurology and neuropsych franchises have potential health millions. We're taking on diseases that have massive impacts on people, families, society and generations, and we're committed to getting it right even in the face of major paradigm shift and major expectation changes. And let me just put this out there. Many of us are getting prepared to spend kids back to college and on certain times. If you have a daughter entering your software year, and you discover that you haven't left the room for a couple of weeks, and you're fortunate enough to get her help and she gets the diagnosis of make your depressive disorder. Would you honor on a typical antidepressant that might take 4 to 6 weeks to work with unknown side effects, potentially losing her semester per year for potentially her whole college career. Would you rather have run a drug to it or better after 1 or 2 doses in vacuum classes. I know it's one I would pick. So that's what we're focused on despite some of the feedback we're hearing initially. The achievements of the Sage team this year have set us up for several potential near mid- and long-term tales rest of the year and into 2022. The Sage team will continue to work tirelessly to deliver on our vision of bringing medicines that matter to patients so they can get better sooner and stay better longer. Thanks again, and have a great day, everyone. Bye.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day.