SAGE Therapeutics Inc (SAGE) 2015 Q4 法說會逐字稿

Good morning, and welcome to the SAGE Therapeutics fourth quarter and full-year conference call.

(Operator Instructions)

This call is being webcast live on the investor and media section of SAGE's website at SAGERX.com. This call is property of SAGE Therapeutics, and recordings reproductions and transmissions of this call without express written consent of SAGE Therapeutics is strictly prohibited. Present note, this call is being recorded.

I would note to introduce Paul Cox, from SAGE.

Good morning. Today, we reported our fourth-quarter and full-year 2015 financial results, recent corporate highlights, and upcoming milestones. The press release and the presentation slides used on this call can be found in the investor and media section of our website, at SAGERX.com

On slide 2 of the presentation is the agenda for today's call. We will begin the call with prepared remarks by Dr. Jeff Jonas, our Chief Executive Officer; and Kimi Iguchi, our Chief Financial Officer. Following prepared remarks, we will open the call for a Q&A session, and will be joined by Dr. Steve Kanes, our Chief Medical Officer.

On slide 3 is our Safe Harbor statement. During today's call, we may make forward-looking statements, including statements about our expectations as to future clinical development milestones and timelines, the potential results of our activities and evolution of our business, and our financial projections. Actual results may differ materially.

The risks and other factors that could cause actual results differ are discussed in today's press release and in the risk factors section of our quarterly report form 10-Q filed with the Securities and Exchange Commission on November 6, 2015, and other reports filed with the SEC. Any forward-looking statements represent our view as of today, only. We may update these statements in the future, but we disclaim any obligation to do so.

I would now like to turn the call over to Jeff.

Thanks, Paul. I'd like to welcome everyone to our call. I'll begin my comments with slide 4.

In 2015, we took big steps towards becoming a fully integrated biopharmaceutical company, as we focused on becoming one of the true leaders of innovation in CNS drug development. And 2016, we think has the opportunity to be a truly transformative year for SAGE.

I'm very excited to walk through our extremely active pipeline and all of the milestones we anticipate achieving this year, starting with ongoing phase 3 status trial of Super Refractory Status Epilepticus and moving on to our additional GABA based clinical indications and our emerging NMDA platform.

All of this is possible through our novel scientific platform, which we believe offers up the opportunity to develop innovative new treatments for patients with life altering central nervous system disorders, and to do so through a rational sequential clinical development approach that we believe gives us the best possible chance of success.

Turning to slide 5, we will begin with our lead program: Sage-547, for Super Refractory Status Epilepticus, or SRSE. Which currently has no approved therapy, despite the extreme unmet medical need. Following our strong results in the phase 1-2 study for this devastating disorder, we initiated our phase 3 status trial this past August. We anticipate this trial will enroll up to 140 patients to achieve 126 evaluable patients, and we intend to initiate up to 150 sites in the US, Canada, and Europe, so this is a global trial.

This is a randomized, double-blind, placebo-controlled study which is being conducted under a special protocol assessment agreement with the FDA. Enrollment and site openings have gone well, so we were pleased to announce in December that we now expect to read out topline results from this study in the second half of 2016. That timing remains on track today, and as a reminder, SAGE-547 for SRSE as being developed under the orphan drug law and fast-track designations.

I would like to turn now to slide 6. We have several important milestones that we expect in the first and second half of 2016, with other indications within our GABA phase pipeline, as you can see here on slide 6. I like to remind folks about our clinical development strategy.

In addition to SRSE, we believe that we have identified a number of CNS disorders that can potentially be targeted through the mechanism of GABA synaptic and exosynaptic modulation. And building off our data and proof of principle in SRSE, we have worked to test SAGE-547 and its mechanism in several additional indications in order to validate our hypothesis that these indications may respond to modulation of exosynaptic GABA. If we see positive activity in these so-called probe studies, we believe this gives us confidence in advancing our next generation GABA candidates into those indications.

These GABA candidates are not only more potent, with similar pharmacology, but have optimized PK profiles, or pharmacokinetic profile, designed for their targeted indications. You can see this concept laid out on slide 7.

Executing on this approach during 2015, we were excited to share data from our proof of concept study of SAGE-547 in both essential tremor and severe postpartum depression, or PPD. For essential tremor, last fall we announced positive topline data in a placebo-controlled proof of concept trial with 25 patients, where we demonstrated clear separation from placebo on efficacy endpoint at the target dose.

For severe PPD, in a proof of concept study last year, we evaluated four women with severe Hamilton Depression Scores, and demonstrated significant impairment in less than 24 hours on those scores, with sustained improvement across 60 hours of treatment. These data are in line with our hypotheses generated from known animal data that suggests exosynaptic GABA modulation may play an important role in postpartum depression and perinatal behavior.

We recognize that these data were obtained in an open label matter. So to validate that initial signal in postpartum depression, we are currently conducting an additional placebo-controlled phase 2 proof of concept study in up to 32 patients across multiple sensors who have been diagnosed with severe PPD. We expect this to rebound in the first half of this year.

As we proof of mechanism with SAGE-547, the second part of our plan comes in the form of SAGE-217, our oral modulator New Chemical Entity, or NCE, that has a very similar modulatory mechanism as SAGE-547, but with an optimized PK profile intended for one daily dosing and also designed to be much more potent at both the synaptic and exosynaptic receptors. SAGE-217 is currently in phase 1 development and is performing well in healthy volunteers.

If we see the PKPD and safety data that we hope to in phase 1, in the second half of this year we plan to move SAGE-217 into phase 2 studies in essential tremor, postpartum depression if the data from SAGE-547 phase 2 results positively, as well as a program encompassing a series of orphan epilepsies, where we believe from all of our preclinical work that 217 should of clinically meaningful activity.

All of this gets back to our unique approach to CNS drug development, using clear binary signals and readthroughs across mechanism in preclinical work to efficiently explore initial activity while optimizing a final candidate for a particular indication. We're very excited to read out both the PPD data in 547 and the phase 1 data in 217 in the first half of this year, and then update you on these three indications when we move forward in the second half of the year.

In the meantime, we also continue to invest in the development of next generation GABA candidates further down the pipeline. This includes SAGE-689, a next generation positive allosteric modulator of GABAa receptors that has been optimized to have a wide therapeutic window, rapid clearance, and potent anti-seizure effect. We believe SAGE-689 can have potential indications where a high-degree of anti-seizure activity and sedation is desirable before the introduction of general anesthesia, such as in status epilepticus in the emergency room, but also in the other additional disorders.

We announced back in December that this program had been delayed due to a non-clinical, non-toxicological request from the FDA, and we still expect to initiate our phase 1 trial in the second half of 2016, assuming the FDA is satisfied with our response.

Turning briefly to our NMDA program on slide 8. I won't spend much time here, but as I laid out for you in November, this is a piece of our pipeline that we are incredibly excited about. The NMDA receptor system is one of the key explanatory systems in the central nervous system and underlies cognition and memory, among other functions.

We feel that SAGE is right at the forefront of the emerging biology here, and we continue to advance our [first] development candidate, SAGE-217, which has been designed to be a first-in-class, high-potent and selective modulator of NMDA, with an optimized pharmacokinetic profile intended to support oral dosing.

The initial indications are targeted at two orphan indications where NMDA hypo-function or dysfunction has been established. Smith-Lemli-Opitz Syndrome, or SLOP syndrome, and Anti-NMDA Receptor Encephalitis, for which there are no approved therapies. We believe these are homogeneous populations with peripheral biomarkers that may also be implicated in other larger CNS indications resulting from NMDA receptor hypo-function or dysfunction.

And again, going back to our broader CNS development strategy, our approach in our NMDA program echoes what we have done with GABA, and that is a broader CNS development strategy pursuing a rationalized approach to further development by first establishing mechanism and proof of activity in smaller indications, and then hopefully proceeding to larger markets where we can approach these markets with a biomarker-driven strategy.

I'd like to turn now to slide 9. As I hope you can see, we've built on our initial success of development of SAGE-547, and now have what we believe to be a industry-leading CNS pipeline with significant potential across a wide range of CNS disorders. We think we can achieve this goal by targeting fundamental CNS systems such as GABA and NMDA. I'd like to just walk quickly through the anticipated milestones I covered here on slide 9.

In 2016, we expect data from the phase 2 study of SAGE-547 in severe PPD and the phase 1 readout from SAGE-217 during the first half of this year. We anticipate data from the phase 3 status trial in the second half of 2016.

Contingent upon first-half readouts, we anticipate potential initiations for several phase 2 studies with SAGE-217, including studies in essential tremor, postpartum depression, and orphan epilepsies in the second half of 2016. And, we expect to initiate our phase 1 program with SAGE-689 in the second half of this year.

So as you can see, we have a number of important inflection points we hope to achieve over the next 12 months that we hope will lead us closer to becoming a commercial-stage biopharmaceutical company, and we also -- that we hope will help define our late stage pipeline in GABA related and NMDA related indications.

I would like to thank you all for your attention, and now I'd like to turn the call over to Kimi to discuss our financials before we get to Q&A.

Thank you, Jeff. On slide 10, we have a summary of our financial results for the fourth quarter and full-year 2015. Cash and cash equivalents at the end of the year totaled $186.8 million. This does not include funds from our recent public offering, which raised approximately $140.4 million in net proceeds.

Research and development expenses for the fourth quarter were $20.4 million, including $1.6 million of non-cash stock-based compensation expense. And, $69.4 million for the full year 2015, which included $5.9 million of non-cash stock-based compensation expense.

Moving to general and administrative expenses. For the fourth quarter, they were $8.2 million, including $2.5 million of non-cash stock-based compensation expense, and $25.3 million for the full year 2015, including $9.3 million of non-cash stock-based compensation expense. We reported a net loss in the fourth quarter of $28.6 million, and $94.5 million for the full-year 2015. As of February 16, we had 32 million shares outstanding.

In the coming quarters, we expect to see increases in operating expenses as we complete our phase 3 status trial for SAGE-547 in SRSE and continue to advance our clinical development and discovery efforts, and also engage in activities directed at a potential NDA filing and commercial launch, and further grow our infrastructure and organization. Based on our current operating plan, we expect our cash and cash equivalents and the net proceeds of $140 million from the offering will be sufficient to fund our current operation into the beginning of 2018.

Before we open up the call over to Q&A, I'd like to remind you that we plan to attend a number of upcoming conferences in the first quarter, which are listed on slide 11. These include the Epilepsy Foundation Pipeline Conference, which is taking place in San Francisco on February 25 and 26. The Cowen Healthcare Conference, where we will be presenting at 4 PM Eastern time on March 7. The American Chemical Society National Meeting and Exposition, taking place in San Diego from March 13 to March 17. And, the American Academy of Neurology annual meeting, or AAN, taking place in Vancouver from April 15 to April 21.

We will now like to open the call for Q&A. Operator?

(Operator Instructions)

Corey Kasimov, JPMorgan.

Good morning, guys, this is Morgan on for Cory. I just had a quick question. This may be getting a little bit of ahead, but can you kind of talk about what preliminary commercial preparation that you may have ongoing right now for 547? What kind of steps are you taking now to ensure that everything will run efficiently, given you have positive data at the end of the year?

Good morning, and thanks for the question. We've taken a number of steps, as you know, to -- well, I'll answer the question because you don't know (laughter) -- to prepare pre-commercially. So we've begun, as you know, we are doing payer research both here and overseas based on what we project could be a target product profile, and that also will give us an idea in looking at potential reimbursement channels.

So we're doing -- that's already occurring, and as you know, with the acceleration of our timeline and the compression of the time that DEA could have to review, which was shortened by statute last year, we've also begun hiring in particular areas in terms of brand management. We've also brought in the former head of supply chain from Cubist, Heinrich Schlieker, who is now running our supply chain organization to make sure we have our manufacturing supply chain locked down.

In addition, we're building up our medical science liaison group and as well as our medical affairs group, and as Kimi noted earlier, we are now beginning to publish and present more broadly this year as the data come through and as we anticipate many of our patents we'll be filing, so we'll be freer to speak about structures and things of that nature. So we have a fair number of initiatives underway in preparation -- for pre-launch preparation. Obviously that will depend on the outcome of the Phase 3 program, which is still performing well and on track to report out of the second half of this year.

Okay. Great. Thanks a lot.

You bet.

Ritu Baral, Cowen and Company.

Hello, guys. Thanks for taking the question. Wanted to just dig in a little further on the status of your Phase 2 PPD study. Is that open, and how is enrollment going? Can you give us any more details on the design and powering of that study, other than the 32 patients?

The [phase] study is enrolling. We have almost completed opening up all of the sites. There will be 10 to 15 sites. We've had a lot of interest in this study, and it is on track. As you know, as I described, it is a reasonably straightforward design, and the design was informed by the original open-label data in terms of the treatment protocol, the dosing protocol, the primary and secondary endpoint, as well as the follow-up, up to 30 days. It is doing quite well, and it is on target to report out in the first half of this year.

Are the entry criteria for the patients pretty identical to the pilot study?

They are. One of the approaches we have taken as a Company is to use phase -- each study to inform the next study. Since we had, although it was open label, I want to make sure I point that out, we had very dramatic results in the first four patients. We determined at that point that we should keep the same inclusion/exclusion criteria.

The only modification that we've been allowed to now is that women who are breastfeeding, we have now been granted a waiver by the FDA to include women who wish to breastfeed. They would have to pump the milk and not use it, but they are now allowed to be enrolled. So that is the only difference, which is obviously -- we're very encouraged by. But otherwise, same endpoint, very straightforward design. No bells and whistles. It is a very straightforward clinical design.

And my follow-up is on 547 and SRSE. The tightening of the timeline around the data that you have given us, can you tell us if that is driven by your visibility on event rates or your visibility on just enrollment?

It's actually driven by all those factors. Steve's team, who is here. He can give more granularity. We had a working model that assumes a certain population prevalence, and assumes a certain enrollment rate, and assumes a certain time period for opening up sites. Remember, many of these sites are not classical clinical trial sites, and they are actually working ICUs.

We had a pretty broad range when we started, and as a result, the tightening of the timeline really comes to all those factors on the model. Our confidence in the actual prevalence, the enrollment rate, as well as our ability to open up sites quite expeditiously. We've had a lot of interest in sites both here and in Europe as well. So all of those things moved forward well. The other point I would make is, when we started the estimation for launch period, we had assumed -- because this is a GABA mechanism -- although we don't know, that there was a possibility that DEA would at least want to pass judgment on scheduling. And as you know, historically, that can take 12 months or more, and we had that baked into our launch plan.

This gets back to the first question as well. In December, the Congress passed a law that now mandates DEA has only 90 days to decide on scheduling -- and remember, that can't start until the NDA is approved. So that was always another unknown that has now been removed, and that was the other reason we accelerated the timeline, in addition to the fact that the trial is performing well.

Got it. My last question is on your NMDA program. Can you give us any more detail on the mechanism there? I know there's a variety of pipeline programs that affect either the NMDA, the channel or an allosteric site, and what the mechanism -- what your mechanism might mean for future indications?

The Sage team, a number of years ago, about three years ago, published data with collaborators that identified 24-hydroxycholesterol as the probably, possibly the native positive allosteric modulator of NMDA in the brain. Knowing that this was an oxysterol, which some of you know is now a very interesting mechanism to a lot of basic scientists, in terms of neuroscience, we decided and understood at that point that we had a potential breakthrough in terms of a molecular scaffold that could impact NMDA activity.

So if 718 was born from this original discovery, and it is, we believe, a first-in-class positive allosteric modulator in NMDA. So 718 has been designed much like to 217 -- I apologize for the numbers, our chemistry guys aren't really good chemistry namers. But 718 is, we believe, will also be like to 217, orally available, as well as a highly potent, possibly once-daily therapy. So our belief is that, as a first in class, we decided to focus on positive allosteric modulating, because no one has really ever done this successfully, and we already have non-GLP tox on this compound. It is an IND enabling toxicology now, but the non-GLP tox suggest it is behaving as we anticipate, as a reasonably -- as a very on-target positive allosteric modulator, without any of the associated excito-toxicities that have often been hypothesized to encumber this particular mechanism.

So we decided that, therefore, as we brought the drug forward -- and we also understand from the animal data that this is a mechanism that ought to be useful in cognition, attention, and other areas of CNS function. And, our approach to development was to therefore -- we said, rather than going into larger markets first, because people have talked about these [mode] programs and Alzheimer's or autism, we -- our translational group identified two disorders that I mentioned on the call, both of which have known NMDA hypo-function, which therefore ought to be modulated and attenuated by treatment with 718, if we get through Phase 1.

They both also have peripheral biomarkers associated with a particular conflict of symptomatology that extend into large markets, such as Alzheimer's and other encephalitides, as well as in autism. So our hope is that, even though we can get indications in these rare diseases, that we can take the data if they are positive and then use a prospectively defined biomarker which has a known symptom complex associated with it, and move then into larger markets with this molecule. The other part of the NMDA program is the NMDA -- the NAM, or the Negative Allostery Modulator program. That is a little bit further behind, and we're exploring a number of potential approaches here on that, and we'll have more news about that probably later this year or early next year.

Great. Thanks for taking all of the questions, guys.

You bet.

John Newman, Canaccord.

Hello, guys. Thanks a lot for taking my questions. The first question I have is, Jeff, can you comment on what you guys are seeing in terms of the screen failure rate for 547, in terms of that initial weaning attempt, and is that relatively in line with your expectations when you designed the study?

We're not doing -- thanks for the question. This is a -- as a Phase 3 program, the primary goal for the Company is to maintain the integrity of the program. It is completely blinded, and so we're not doing interim looks or any of that nature. All we can tell you is that it is well on track to report out in the second half of this year. We did -- one of the reasons we put out the evaluable versus the screened rate is that was based on the -- we tread careful to do that in anticipation of this kind of question. That's why we tell people we anticipate needing to enroll about 140 patients, randomized to get about 126 evaluable.

Other than that, we are really not doing any interim looks. I would point out, though, that one of the major advantages of the study is that we are doing this qualifying wean. That, of course, helps to regularize and homogenize the population, and make sure that the patients we're treating actually have true diagnoses of SRSE.

Okay. Can you give us just a sense, qualitatively, if, on the initial data readout, if you will be talking at all about some of the secondary endpoints? I don't know if you have made that decision yet?

Our basic -- we're going to -- let me think how to say this -- this will be an -- obviously, if it's positive, this will be an NDA filing. So our intent will be -- right now, our plan is to give out the primary endpoint, along with what typically is associated with this type of reporting out: top-line results, as well as safety and safety data, ADOs, drop-outs due to death, discontinuations, things like that.

We may give some granularity around the weaning, in terms of the efficacy, but we will have several secondary endpoints, many of which are designed to look at pharmaco-economic advantages of this approach, and those we will probably wait for publication or a scientific presentation.

Okay. Then in terms of 217, you talked about several different indications where you're planning on looking at the agent. So, given your comments regarding large indications versus small indications, if you had the choice between all three of PPD, orphan epilepsies, and essential tremor, do you have a bias at this point towards going for smaller indications versus larger indications? Or is it simply -- let's look at what the data tells us and then let's decide about what size indications to focus on?

Firstly, I love all my children. (Laughter). Let me just begin by saying that. Right now, I think that these are all areas where we think -- I think you answered it. It's going to be driven largely by clinical feasibility and our ability to impact patients' health and care, and improve patients' lives. Obviously, the great unknown is postpartum depression. If that were to report out positively from 547, that has very broad implications for what this mechanism could do. Not only in postpartum depression, but in other forms of depression, either sex-linked depression or generalized depression. That could change our thinking, candidly, about how we approach Phase 2.

We already have very good data in tremor, we believe, so that I think looks to be something we would also think to have to really consider hard, because the clinical feasibility, we think, is quite good. And for orphan epilepsies, we have such a profound database, historically, about this mechanism. So all of these, we think, are highly feasible and have already been arguably somewhat de-risked.

I think, as you say, to conclude, it's really going to depend on how postpartum depression reads out, and how the drug will continue to perform in Phase 1. We are -- that is in the middle. We are already in multiple ascending doses. The drug is performing very well. We are comfortable in saying it's going to be a very potent drug, and it is likely to be a once -- a drug used once daily. So, right now, it is moving very well on track. So I think that is the other piece of the puzzle, is how 217 finally performs in the Phase 1 program, as to where -- how we sequence the introduction of Phase 2.

I think the other implicit comment or inferential thing that one can infer from your question is that this is a mechanism that is likely to be quite potent and have a broad potential use across multiple indications. We believe we probably have the industry-leading platform in this particular mechanism. We will be looking opportunistically, not only for 217 but some of our follow-on compounds, of where we might use them, as we get the readouts from Phase 1.

Great. Thank you.

Thanks John.

Paul Matteis, Leerink.

Hello, guys. Thanks for taking my question.

How are you?

Doing well. Thanks, Jeff. We have a couple. The first one is on the 140 patients enrolled versus to get 126. Can you expound upon what could exclude a patient from being in the 126 sample from the initial 140 sample that is first enrolled?

Basically, remember we described this when we did the Phase 2. So a few patients either died before they could have a drug administered, or their complications preclude completion of treatment. And an obvious complication of the underlying disorder, so somebody with a stroke bleeds out and things like that. Occasionally there will be -- a family may decide to withdraw consent for treatment given the exigent circumstances from which these patient suffer.

So those are the kinds of things that occur. So as a result, in order to give some -- we had the same ratio in the Phase 2, which was 25 enrolled, 22 evaluable, so that is how we did that. We just wanted to give some clarity, in terms of the number of patients we had projected we would need to screen.

The other point is, of course, that we -- also, remember, I had pointed this out to the earlier question, we are doing a wean attempt on-trial, prior to randomization. So, some of that evaluability will be removed. So that is the reasoning behind that.

Okay. Jeff, is the evaluable population the one that is a evaluated in the FDA approvable ITT analysis?

It is a randomized double-blind study, and it is likely that we will use -- it is a discussion we will have at the [AC] and, frankly, that will depend on the nature of the exclusion. So, for example, it's an old statistical conundrum. We used to call this the school-bus problem where, if your patients are coming in for their first treatment and the school bus crashes, they have been randomized -- do you include them or not in the evaluable? This is a unique population, and so that's a discussion that's in the [stat], but we haven't made it public because it was a discussion and something we're very happy with the outcome with the agency.

Okay. Great. And then I have one more pipeline question. We have done some more reading on allopregnanolone and the mechanism, and have found that, beyond its effect on GABA, its mechanism is more multi-faceted. The drug also can work on some various progesterone receptors.

So when you think about using this as a probe molecule and subsequently moving forward with SAGE-217, to what extent does SAGE-217 fully replicate allopregnanolone's pharmacology? And in these various indications, how confident are you that it's just ALLO's effect on GABA that could be driving a benefit in PPD, tremor, et cetera?

If you look at the animal data, and we can get into more detail if you want, but basically the concentrations required for the off-target effects are much higher than those -- than ALLO's effect on GABA. In fact, if you look at some of the animal data for progesterone, by example, has often not been useful in the same indications in the animal data where allopregnanolone has been active.

The second point I would make is that, if you look at the data we have already published or made public, we've already shown for ALLO, it has GABAergic-like effects in animal models that are replicated, say for example, in beta-power for EEG in humans across indications. Those same effects that we see, that we believe are GABAergic are also seen by 217. We think that -- so we don't think there's anything magical about the off-target effects of ALLO, and if you look at the data, say, for PPD, it is pretty clear that it an extrasynaptic effect, not a more promiscuous effect, based on off-target.

The 217 data in animals really does look very similar, though more potent, than 547, which suggests, in and of itself, that the mechanism is GABAergically driven, not by these off-target effects. I'd also make the final point is that we believe that, for a chronic oral therapy, that the ideal pharmacology is one that is clean, with minimal off-targets, and of course that has been our thesis in moving forward both 217 for chronic oral use, as well as 689 for more complicated use in the emergency room.

Okay. Just one quick follow up. Have you done -- I know animal models in depression are highly flawed, but have you done any animal work of SAGE-217 in depression, on things like the force-swim test or other various animal models?

I'm going to turn it to Steve.

The animal models that we've been looking at have primarily been in the areas of seizure, some level of anxiety, and sedation. As we get more data -- and in this case we are following clinical data as opposed to relying on what I would consider to be somewhat not as predictive animal models in terms of depression -- we'll release those information as well.

I think the one point we've made, that Steve alluded to, as expected, 217 does look -- in animals, does appear to have anxiolysis, and we do see this in some preliminary data in humans as well. I think from this standpoint, we'll await -- the PPD program, I think, will be somewhat probative for this, and if that program reads out positively, we will pursue -- more actively pursue some of the work for validation.

Let me just say this. And you probably know this, and I know it's not meant to be a trick question. A lot of rats have drowned in the service of developing anti-depressants to no avail. The forced-swim test, learned helplessness have had imperfect translation into clinical activity. So I think, for to 217 and 547 in particular, I think this is a great example where leading with human data is really the proper approach. And as I say, if we see such activity, we can then reverse engineer some animal data, but I think the human data is really obviously going to be the most compelling.

Sure. Makes sense. Okay. Thanks guys.

(Operator Instructions)

Raj Persad, William Blair.

Hello, guys, thanks for taking the question. Can you just clarify the wean prior to randomization in the STATUS Trial? So you guys do a qualifying wean in this 24 hours post, and then you guys randomize? Sorry, I just need a little clarification on that.

Actually, that is right. Thanks, Raj. I'll let Steve give you some more granularity on that.

When patients are enrolled, what we will do is ensure that, within the first 24 hours, we will do what's called a qualifying wean. That is to ensure the patients remain in status epilepticus before being randomized. So regardless of what their history has said before they have been enrolled, we want to ensure that, to the closest degree possible, they remain in status prior to being randomized into trial.

Okay. Regarding SAGE-217, what internally would you consider a success in the Phase 1 trial? Is it a better safety profile than the 547? Is it a better PK profile? And then, what doses are you using, and how would that compare with the 547 doses that you have used in the proof-of-concept trials?

The Phase 1, like any standard Phase 1 in healthy volunteers, is really trying to help us understand both the exposure as well as the safety. So, in terms of exposure and PK, what we're looking for are the things that Jeff was referring to, which is good oral bioavailability, which [case here we] mean very robust, and we have parameters for this. It needs to have very clear oral bioavailability that would not be dose limiting. And the other would be to confirm what we've been seeing in animal models, which has to do with a long half-life, supportive of once a day. So those would be considered swinging out of the park home runs, in terms of what we would expect. Of course, the other part of this is safety, and safety both in single and multiple dosing. So these are just sort of the baseline.

The other things we're looking into, and I think it speaks to your other question, which is, what is the dose ranging that we would need to be in? And there we've been using EEG as a way of identifying what would be the appropriate dose ranges against a variety of indications.

So, as we have discussed, in the past we have used beta power as a way of understanding the levels of exposure, not necessarily dosing, that would have predictable GABA-related effects in essential tremor and in postpartum depression. And we'll use that as an indication of what sort of doses we give to select into Phase 2.

So, basically, what Steve said, we will have pharmaco-EEG, and I think the point that I want to emphasize is that we have shown beta power to be pretty closely correlated with activity in the tremor program. We really have a very powerful and reasonable biomarker that I think will inform how good a drug 217 is likely to be, moving forward. So we'll get a sense of therapeutic index and things of that nature.

So when this concludes in Phase 1, we'll have single offending dose, multiple offending dose, obviously standard PK and some pharmaco-dynamics, which I think will go a long way to either risk or de-risk our further development of the molecule. But, as Steve has said and I have said, right now it is performing as well as we could have hoped.

Okay. And one last question, Kimi, with all of these shots on goal you guys have, what goes into the financial model with the 2018? Is that assuming everything works, and we're going to Phase 2 on everything, and the ramp as well? Just a little clarity on that.

It really -- it's the pipeline that we showed in the slide deck is all of the programs that would move forward. I think at this point PPD is one where we don't have visibility into what that Phase 2 would look like. So that one, we will need to reevaluate.

Great. Thank you.

I'm not showing any further questions at this time. I would like to turn the call back over to our host.

Thank you, everybody, for your attention this morning. We think 2016 is going to be a transformative year for the Company. We appreciate your interest and support, and everyone have a great day.

Ladies and gentlemen, this does conclude today's presentation. You may now disconnect and have a wonderful day.