SAGE Therapeutics Inc (SAGE) 2017 Q2 法說會逐字稿

Good afternoon, and welcome to Sage Therapeutics Second Quarter 2017 Financial Results Conference Call. (Operator Instructions) This call is being webcast live on the Investors & Media section of Sage's website at sagerx.com. This call is the property of Sage Therapeutics and recording, reproduction or transmission of this call without the express written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded.

I would now like to introduce Paul Cox, Head of Investor Relations at Sage.

Good afternoon. Today after market close, we issued a press release with our second quarter 2017 financial results, along with recent company highlights, upcoming milestones, and progress on our corporate strategy. The press release and the presentation slides used on this call can be found on 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.

On Slide 3 is our safe harbor statement. During today's call, we will make forward-looking statements, including statements about our expectations, plans and time lines for clinical development, reporting of clinical trial results and planned regulatory activities, the potential success of our development efforts and product candidates, including the potential for approval and future commercial launch, our financial projections, and expectations regarding other upcoming events.

Actual results may differ materially. The risks and other factors that could cause actual results to differ are discussed in today's press release and in the risk factor section of our most recent quarterly report on Form 10-Q filed with the Securities and Exchange Commission and other reports filed with the SEC. Any forward-looking statements represent our views 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. Good afternoon, everyone, and welcome to our call. Please turn to Slide 4 for our current development pipeline. Our primary focus at Sage is on building a company that can deliver differentiated medicines developed with a corporation dedication to making people's lives better. Throughout our 6-year history, we've explored innovative methods of drug discovery and development as well as clinical trial design in pursuit of novel treatments for central nervous system -- CNS disorders -- that may address gaps in the efficacy and safety profile of current therapies.

We believe that this deliberate, thoughtful, and disciplined approach has facilitated the potential for 2 Phase III data readouts and multiple other clinical milestone events in the second half of this year. With our progress to date, I'm extremely proud of our team at Sage and the insights they've made in understanding a diverse set of disease areas, positioning Sage for success as potential multiproduct CNS leader.

Turning to Slide 5. I'd like to update you on our progress in a number of our clinical programs. We recently completed enrollment in the Phase III STATUS Trial, the first ever global randomized, double blind placebo controlled trial in super-refractory status epilepticus, or SRSE. We continue to expect to report top line results from the status trial in the third quarter of 2017, following completion of all study follow-up periods in data analysis. We anticipate that this will be our next major data readout.

As a reminder, we expect top line data to include the primary endpoint, safety and tolerability, and select secondary endpoints, including open label retreatment arm response and the CGI scale. We also expect to provide information on trial metrics such as response of RSE patients to the diagnostic screen and numbers of patients presenting for screening to provide greater granularity regarding the potential SRSE population at risk.

Turning now to Slide 6. We're also making great progress in our other brexanolone program, our Phase III trials for developing brexanolone as a treatment for post-partum depression or PPD. This is the Hummingbird program, consisting of 2 separate trials -- Study 202B and 202C. Both of these Hummingbird studies are enrolling on track and we continue to expect top line results in the second half of 2017. As you may recall, the FDA has granted Breakthrough Therapy Designation and the EMA has granted PRIME designation to brexanolone for the treatment of PPD.

We conducted our PRIME meeting with the EMA earlier this year and recently received positive scientific advice. Incorporating the scientific advice from the EMA, we believe our proposed Phase III program, if successful, will be sufficient to support submission of an MAA to the EMA for the PPD indication in the EU.

We anticipate that the outcome of the ongoing Hummingbird studies, if supportive of an MAA filing, will inform any future regulatory discussions and potential post-marketing clinical development obligations. Also for brexanolone and PPD, we were pleased to have the Lancet recently publish the results from our Phase II double blind randomized and placebo controlled study of brexanolone for severe PPD. We are now focused on delivering Phase III results for brexanolone in both SRSE and PPD in 2017 and if successful, moving forward with efficient filings for regulatory approval in the U.S. and EU, while incorporating the advice from EMA to better inform the timing and pathway for seeking approval in PPD in the EU.

On Slide 7, let's turn now to our lead oral product candidate, SAGE-217, in Phase II development for both mood and movement disorders, with 4 Phase II clinical programs now underway. SAGE-217 is a novel, proprietary, highly potent, orally active neurosteroid that, like brexanolone, is a positive allosteric modulator of the GABAA receptors, targeting both synaptic and extra synaptic receptors.

On Slide 8, we show an important update regarding 217 in major depressive disorder, or MDD. We are currently enrolling a multi-center, double blind, placebo controlled, randomized Phase II clinical trial of SAGE-217 in MDD. Due to the strong pace of enrollment, we now plan to increase expected enrollment to approximately 88 patients with moderate to severe MDD from approximately 66 patients. And we now also anticipate reporting top line results from the Phase II trial in the second half of 2017 rather than in 2018.

As a reminder, the FDA granted fast track designation to SAGE-217 in MDD in May based on our positive, open label, Phase II study, the results of which were recently presented at the Society of Biological Psychiatry Annual Meeting in May and these are shown on Slides 9 through 11.

In addition to MDD, we have 3 additional Phase III clinical programs studying SAGE-217 in both mood and movement disorders. We are currently conducting Phase II studies of SAGE-217 in PPD, essential tremor, and Parkinson's disease and we continue to anticipate top line results in the second half of this year.

Now turning to Slide 12, we are also conducting a Phase I single-ascending dose trial of SAGE-718 in healthy volunteers. SAGE-718 is a novel, oral, first in class, oxysterol-based positive allosteric modulator of the NMDA receptor. Positive modulation of NMDA receptors may have potential in the treatment of a range of neurological disorders associated with a variety of cognitive neurological and behavioral symptoms. Top line results from the single-ascending dose study are also expected in the second half of 2017 and on Slide 13, we are continuing our research efforts on the earlier side of our GABA-receptor modulation portfolio.

We recently selected SAGE-324 as our next novel oral development candidate intended to be developed with a focus on indications involving GABA hypofunction. SAGE-324 is currently in IND-enabling studies. I'd like to say that we are very pleased with the progress we are making across our portfolio. With brexanolone in both SRSE and PPD, with SAGE-217 across our Phase II programs, and with our earlier stage compounds, including SAGE-718 and SAGE-324.

As I hope you can see, the remaining months of 2017 promise to be busy and potentially transformative. We expect to report results from a number of clinical trials this year, including our 2 Phase III clinical programs, which if positive will put us on the cusp of a potential product commercialization in 2018.

Before I close, I wanted to say again how proud I am of the great work and progress achieved by the Sage team and their continued enthusiasm to develop novel and unique drugs for people with CNS disorders. Our company building mission is to position Sage for long-term success as a multi-product neuroscience drug company. We believe that our wholly owned, internally generated pipeline and our great team at Sage provide us with the opportunity for leadership in neuroscience R&D with the goal of bringing to market innovative medicines to address life-altering CNS disorders.

And while we are proud of our progress over these last 6 years, we are even more excited by what lies ahead and we look forward to updating you soon. With that, I'll turn the call over to Kimi.

Thanks, Jeff. Let me start with a quick summary of our financial results for the second quarter, and then provide an overview of our financial guidance.

As you can see on Slide 14, we have a summary of our financial results for the second quarter. We ended the second quarter with $285.9 million in cash, cash equivalents, and marketable securities. Research and development expenses were $55.9 million in the second quarter of 2017, compared to $26.1 million for the same period of 2016. The increase in spending was primarily due to several factors relating to advancing the portfolio and expanding our team.

For brexanolone in SRSE and PPD, we continued to incur expenses related to completing the Phase III STATUS trial in SRSE, conducting the ongoing Phase III trials of brexanolone in PPD; and activities in preparation for a potential filing for regulatory approval.

We also continued to advance our oral programs with SAGE-217 and SAGE-718. As Jeff described earlier, Stage 217 is being studied in 4 ongoing Phase II clinical programs in the areas of mood and movement disorders. In SAGE-718, our first NMDA program, has progressed into the clinic with a Phase I SAD trial currently ongoing.

We continue to invest in our preclinical and discovery efforts to identify our next potential development candidates and finally, we're building our R&D organization to support development of a robust portfolio and anticipated growth.

Turning now to general and administrative expenses. They were $15 million in the second quarter of 2017 compared to $8.9 million for the same period of 2016. The increase in G&A expenses was primarily due to the increase in personnel-related expenses, professional fees and facilities to support our expanding team and operations as well as continued preparation for a potential commercial launch.

We reported a net loss in the second quarter of $70.2 million, compared to a net loss of $34.7 million for the same period of 2016. As of August 3, we had 37.4 million shares outstanding.

We're very pleased with our progress and our strong financial position and we are reiterating our financial guidance regarding our anticipated cash runway. We continue to expect that our cash, cash equivalents, and marketable securities will fund the anticipated level of operations, based on our current operating plans, into the second quarter of 2018.

Our financial guidance takes into account the continued advancement of brexanolone in SRSE and PPD, including completing our Phase III clinical development programs; preparing potential regulatory submissions, and continuing the ongoing pre-commercial activities to prepare for a potential launch; advancement our Phase II development of our oral program, SAGE-217, in mood and movement disorders; the Phase I development program for our first NMDA positive allosteric modulator, SAGE-718, and our discovery and research efforts to further advance and broaden our GABA and NMDA-based focused pipeline.

We believe we've taken a very thoughtful and disciplined approach to our financing strategy to date. We've leveraged the achievement of significant milestones to efficiently and incrementally finance the growth in the portfolio and the organization. We've also been disciplined in our approach to spending, gaining certain investments to specific milestones.

This strategy has allowed us the flexibility to pursue our strategic and operational goals, such as our expansion of our pipeline based on efficient and informative exploratory clinical trials. We plan to continue a thoughtful approach to financing our growth. We look forward to a significant number of milestones in the second half of 2017, which you can see on Slide 15.

Each of these milestones and data readouts has the potential to further our efforts to develop innovative treatments for patients and we look forward to updating you on our progress in the upcoming months.

With that, we'd now like to open the call for Q&A. (Operator Instructions) Operator?

(Operator Instructions) Our first question comes from the line of Paul Matteis with Leerink.

Just one on SRSE and one on post-partum depression. On the status study, Jeff, can you talk about the importance of secondary endpoints with respect to regulatory approval and commercial uptake, and how well powered you are on various secondary endpoints at both clinical and pharmaco-economic significance?

With respect to the regulatory pathway, the only endpoint is the primary endpoint and that would be the freedom from recurrence, super-refractory status epilepticus, and the requirement to reinstitute third line anti-epileptic agents. The remainder of the endpoints, obviously, I really can't comment on powering, per se, but there are 2 ways to answer this. As a general rule of thumb, the primary endpoint is the primary endpoint. There will always be interest in these secondaries but they're not a regulatory requirement. They may be of interest for the label and pharmacoeconomics but that's really all I think we can say about that. And as you all know, the study is robustly powered as it is currently constituted.

And then on the Phase III IV post-partum depression studies, I'm wondering when you guys look at these trials, what you think the biggest clinical risk is to success. And I guess one theory that I was hoping you would offer your perspective on is whether or not when you look across CNS, you see a bigger placebo effect in Phase III versus Phase II and how the fact that this is an IV therapy with very strong Phase II data could come into play. Is that at all a concern for you?

I think with respect to the placebo effect, I think we showed pretty well in the control study that the intravenous nature of the drug -- you've heard me say this before -- it's sort of more pharmaco-mythology. There's really no evidence that IVs are inducing a placebo effect or deterring one. And I think as you look over the history of CNS, you'll see that drugs with strong effect sizes almost always overcome placebo effect that are seen in populations. And I think one of the aspects that we've tried to employ at Sage is what we consider a sort of unique approach to this drug development and it's one of the reasons we've been starting with these small methodology trials. People sometimes characterize them as open label but these methodology trials have given us important insights into the design of our Phase IIs and Phase IIIs and it's let us understand and articulate the pharmacodynamics of activity, let us understand the potential for placebo responses, and I think that's why we've been able to accomplish so much with the 8 data readout and with respect to PPD, to design a relatively compact trial. We saw a very large effect size in a small study. We replicated it in the control study and so we believe that this should not be a factor given the effect size and the population that we're studying.

So what do you think is the biggest risk to success given the strength of the Phase II data?

That's a variant of what keeps me up at night and I think for this type of study where you have a completely novel mechanism, you obviously have technical risk, which is can we replicate. We're pretty excited about what we've seen from the Phase II and the open label, and the new preclinical data. So I think we have a very high likelihood of activity. So then that usually comes down to trial metrics and trial performance, patient selection. And I think our team at Sage has done a really good job of making sure that we get the right patients with the right diseases state at the right time. So we've done everything we can to mitigate that but these are standard risks and we obviously have done everything we can to make sure they don't happen to us.

And our next question comes from the line of Cory Kasimov with JPMorgan.

I've got one on MDD and then a follow-up on PPD. So for MDD, are you continuing to follow the initial 13 patients from the Part A non-randomized portion? And if so, do you have any additional insight into the persistence of the therapeutic effect past the 30 days? And with regard to that same study, what would you say is driving the more rapid than expected accrual in Part B? Is this mainly attributable to interest in this specific program? Is it the sheer unmet need of this indication or perhaps both? And I have a follow-up on PPD.

We have no more data that we can release on the patients from the first open label. I think we've gotten everything we can out of that open label study. I don't think we should say much more about it. We're obviously, in the follow-up study, in the control study, we'll be following up -- we'll have data out to Day 42. What we found in this, and I think whenever you design a study around a novel therapeutic mechanism, and here from MDD you think about the classic MDD study, you have your patients are on it for 6 to 8 weeks. Here, you're asking patients with fairly reasonably symptomatic disease to go on a study with only 2 weeks of therapy. And so I think we were pleased by the level of interest both at the site and for patients with MDD to participate in the study. And so as you already know, we were put into a unique position and having a unique opportunity to both accelerate the time line and increase the number of patients at the same time. So we obviously took advantage of that. With respect to the actual mechanism, I think a number of us and myself included, believe that there are other mechanisms for depression that transcend or maybe more important than the monoamine hypothesis, which has really been the underpinning of all these antidepressants for all these many years. And we're all familiar with the STAR D study and other examples that suggest that SSRIs and related compounds don't really treat adequately the majority of these patients. If you look at our GABAergic mechanisms, we do have the operating hypothesis that depression may have some abnormal circuitry involved in its pathogenesis and that by attenuating that kind of hyperactive circuitry, you can actually in a sense reset the brain. And so in our theory, that's always been the theory of why we saw the durability of effect with PPD and the same -- obviously the hypothesis that we see with MDD. And you can, by analogy, look at what we do with SRSE where again you have a pathological circuit of hyperactive electrical circuitry that you basically break that with SAGE-547. Obviously, we have to confirm that in Phase III and then at that point, presumably you don't have many relapses because you've basically reset an abnormal circuit back to normal. So we think there may be some theoretical underpinnings that suggest that this mechanism of action may be distinct from more conventional and other types of molecules that impact the monoamine systems.

And I just had a very quick question on PPD and it was really just with regard to the Lancet publication from back in June. Curious whether it's had much of an impact on the overall interest or awareness in this program, or was the community already quite aware of 547 or brexanolone?

There are actually 2 answers to that. One is I think the patients who have the disease, the doctors that treat them are well aware of the significant level of unmet medical need that is attendant to PPD. But what we have seen is the Lancet publication, it's obviously a premier journal, has really -- and we've had this experience with thought leaders who are not hitherto involved with PPD -- has really generated a great deal of interest in the disorder, and also stimulating new types of approaches thinking that there may be different pathogenic pathways for PPD and other forms depression. So we have seen a generalized information around PPD. I think among the more generalized psychiatric and neurological communities and the OBGYNs obviously.

Our next question comes from the line of Ritu Baral with Cowen.

So you gave us updates on the Phase III data time line but you didn't reiterate or mention when NDA submission may occur on the heels of any successful data. Should we think about that for both indications as a potential 2017 event or are we thinking 2018? And how does your CMC prep supply -- redundant supply inspections, et cetera, factor into all this?

With respect to the overall time line, obviously, the company is going to do everything it can to expedite filing as rapidly as possible. One necessary meeting that we will have, obviously, and that will determine the ultimate time line, will be the pre-NDA meeting subsequent to reporting hopefully positive data. So once you have the pre-NDA meeting, then we would probably at that point be in a much better position to formalize what we think the NDA submission time line might be. So in general, we're not yet prepared to provide any guidance on the NDA at this time. With respect to CMC, I have to say our team has done a great job in developing supply chain, developing commercial supply chain. We've already had -- I think we've made this public -- our pre-CMC meeting with the FDA. So we're very comfortable with our CMC section, our supply chain, and clinical supplies. So all that is going very, very well.

My follow-up question is on the Hummingbird trial. Given the breakdown between 202B and 202C, the severe and the moderate patients, how do you see both those datasets feeding into any potential data -- I'm sorry -- potential label on successful data. Do you at this point expect a label restricted by severity or specifying severity, or could it be more fluid than that?

We believe that the label will be a generalized label for post-partum depression and that's by analogy. We've seen that with depression where there's almost routinely in many studies an HAM-D cutoff but nonetheless, you get the broad label. Also remember that our breakthrough designation encompassed the entire diagnosis of PPD. So we anticipate that these 2 studies will be sufficient both here and in the EU as we release today, to provide a global label for the treatment of postpartum depression, should the Phase III study read out positively.

So a broad label globally with minimal parameters on severity then. Do you think that the data will then be more important for reimbursement versus the label, the 202C versus 202B?

No, I don't think so. I think severity -- there's not always a correlation between severity and morbidity and I think that's what you need to recognize. So severity, as you know, we started with severe mostly because of the requirement for hospitalization. So severity may determine for SAGE-547, by example, where a patient might be administered the drug but it's not a biologically specific subtype. So we don't anticipate that should impact it.

Our next question comes from the line of Tazeen Ahmad with Bank of America.

The first one I have is probably for Kimi. It's on expenses. So you've had a substantial jump in R&D. Can you give us the scale of how to think about the rest of the year and directionally speaking going into next year? You do have several studies under way and a lot of them have a lot of patients in them. So that's my first question. And then secondly, how do you view the competitive landscape in PPD? I think one of your competitors announced that they would be starting a trial in PPD in the near term. How do you think your molecule might just be better than anything else that you're aware of in clinical development?

I will start on the financial side and let me just tell you that we're financially well positioned. I talked about this earlier. We have a very strong balance sheet. I can tell you that we take a very disciplined approach to how we do investing here at Sage. The team really takes time to outline the plans and marry that to milestones, and we really do a lot of looking at that and determining what spend we do now versus later. So the team has a very good handle on that and does a lot of prioritization along the way. And so that disciplined approach is going to really leave us a lot of flexibility going forward. Currently, our guidance remains the same from a cash perspective and we have cash runway into the second quarter of 2018.

And then maybe just a quick follow-up on that. Do you expect the expenses for PPD and MDD to run equal to each other? Or should one be potentially higher than the other?

We don't really give that level of guidance at this point, but I will say that we expect that the spend will continue to increase over time.

So you asked about PPD. A couple of points. One is all this -- these classes of molecules are all the same and as we showed with our collaborators a few months ago, there are distinct differences between the molecules in Sage's pipeline and other companies. Our molecules in particular have the effect of upregulating extra synaptic GABAergic receptors, which appears to be unique to our compounds, and we believe that activity may be instrumental in providing some of the benefit that we hope to display with our program. With respect to competitors in general, I think all I would say at this point is that we're on the cusp of completing our Phase III program. Honestly, there's no one else in Phase III and I don't believe anyone has even begun enrolling in an early Phase II program. So I think what we've done at Sage is -- beside establishing clear leadership I believe in the development pathway -- is we've established ourselves as leaders in the field with our relationship with thought leaders, our relationship with regulatory authorities, remembering that SAGE-547 is the first psychiatric drug, by example, to get PRIME designation. So I think we're in a very good position to move forward very quickly and to provide this drug to patients in need.

And our next question comes from the line of Gary Nachman with BMO Capital Markets.

First on SRSE, now that you completed enrollment, have you reached the original target of 126 patients? Why did you have to go up to 180 sites? It seems like a big number. And how were your able to have sufficient control of these sites in terms of enrolling the right patients and also the protocol?

The one point -- we will provide -- we've met our target enrollment and we'll obviously, at the time of top line release, we'll show all the patient numbers and all the data. So that's number one. With respect to the number of sites, I think we've said this all along. This is an orphan disease and episodic, and we first had a lot of in sites wanting to join the study. So we did accommodate that but we always anticipated that in order to enroll these patients, we would need to have basically a net of sites ready to capture the patients wherever they got ill. Finally, we showed data I think last year at AAN, or neurocritical care, I am blocking which one of those 2, that showed we do extensive auditing. We have a lot of central control and so there's a lot of regularization on the protocols of how -- it was at NCS -- how these patients are treated. So we're very comfortable with the regularity and the conformity with respect to these patients across sites. Finally, just as a side point, given the dispersion of these patients, we understand you always have a risk of sites but it's very unlikely that a single site in this kind of circumstance can be disruptive to the overall integrity of the database. So overall, we're very comfortable with how the trial was conducted. Obviously, we're pleased it's completed and we're looking forward to putting those data out in this quarter.

And then on 217 for MDD, just remind us, is this something you think you could market alone or would it be more ideal to have a partner before moving into a big Phase III? And have you started discussions yet with any partners? And I guess also with greater visibility on filing in the EU for SRSE and PPD, or are you having any discussions with any potential partners for ex-U. S. rights?

One of the theses of Sage, and I think it has been -- we really want to become a leading CNS company. And we're very proud of the people we've hired. We brought on some really -- we have a great bench now, not only on R&D and financial, as Kimi is in the room -- but also, we brought on a great commercial team as well. And I think our execution to date suggests that certainly on the development side, we're perfectly capable of bringing most of our molecules forward by ourselves. With respect to marketing, I have a lot of confidence in the team we brought on and I think we can -- I have a lot of confidence we'll be able to both develop and potentially launch a program -- a drug for major depression in the future if we're fortunate enough to have positive studies.

That's with MDD but what about looking outside the U.S.? If you file in the EU, I'm assuming you would need to have a partner to commercialize that.

We've actually begun work in the EU already. I'm very comfortable that we will be able to do that by ourselves, especially for PPD and SRSE, we have already had a lot of insights with payers and other entities in the EU, have begun work in that area. I'll just say, as a publicly traded company, we'll always do what's best for the product. We'll always do what's -- if we thought a partner could expedite development or expedite marketing in the EU, we'd certainly consider that. But at this time, we have extreme confidence in our team to be able to execute this globally.

Our next question comes from the line of John Newman with Canaccord Genuity.

The first question I have is Jeff, I think in your prepared remarks you mentioned that you will be discussing open label data for the -- in the Phase III study for 547. I just want to confirm that that means you'll be giving information on the percentage of patients that are able to maintain response for both the success and the failures.

Right. So basically, I think what we're talking about that we'll be providing the data on the retreatment data for the patients who don't respond during the placebo controlled portion of the trial. So those patients would be retreated. Now to be precise, I'm just quibbling, it's technically single blinded because of course the patients would be anesthetized and wouldn't be aware of what they're getting. But having said that, those data will be provided. We're also intending to provide the relapse data out to the follow-up period. So that will all be provided.

And then I wonder in terms of SAGE-217 in MDD for the Phase II study, was the decision to increase enrollment made after the enrollment had already picked up or did the enrollment pick up after you decided to increase it?

I'm not sure I could time these out. All I can say is that enrollment was moving along very, very quickly and we had a lot of interest from the sites to enroll more patients and we simply accommodated that. It was simply an opportunity to both accelerate the trial and increase the end. So we just took this opportunity. It's a unique opportunity you don't often get in running a trial and so we just took it.

Our next question comes from the line of Tim Lugo with William Blair.

Is there a chance that we'll get 202B data at a different time than 202C? And also, can you go over some of the advice that the European authorities discussed with you and any kind of adjustments that were made to incorporate that advice?

So we're not going to give anymore granularity on how the individual trials for PPD will read out. We'll have to make the decisions based on how and when they complete, and at that point, we'll have to determine whether we do them one at a time or not. So I really can't comment beyond it at this point, expect to say that both the studies are on track for reporting this half of the year. With respect to the EU, the top line result was that the file that we're anticipating compiling now, the program for PPD, will be adequate for filing an MAA in the EU. So we're really very, very pleased with that outcome. Obviously, we suspect that having PRIME designation was helpful. We had a very good relationships -- a good response with EMA. Obviously, the content of most of the discussions remains proprietary for obvious reasons, I hope. I will say that as with every drug, there is always a possibility for post-approval commitments and there is for us. But a lot of that will be contingent on what the data show from the Phase III. So it's a little bit early to speculate what else might be required after a potential approval. But again, we had very clear communication with the EMA, which is really all you can ask for as a company.

Understood. And maybe for MDD, can you -- did many of the patients from your proof of concept study, did they have prior ketamine use? I know that that seems to be something that comes up a lot when I talk to KOLs. They seem to be embracing ketamine more these days. And I just want to know where do you think your 217 will fit in with that.

I don't have the data from the patients from the first 10, but we should remember that we are not looking at treatment resistant depression. We're developing this drug as a potential first line therapy for major depressive disorder. So we anticipate that these patients, some may come in with having prior ketamine response. Some may not. Usually, you'll have the usual melange of background medicines. Some may be first timers. So we are not proscribing it and the goal, obviously, for the program in the Phase II is to position this drug as first line and by then, we will not proscribe any particular prior treatments.

And our next question comes from the line of Edward Nash with SunTrust.

This is Yun Zhong for Edward. The first one is on the Parkinson's disease program. I saw that the Part B is again an open label study in ten patients seems to be a little different from the approach that you used for other programs and wonder is it because you just want to double confirm the efficacy signal before you move into maybe a larger placebo controlled study?

That's a great question. All the other questions are great too, by the way. Sorry. So what we did with Parkinson's is sort of a good example of why we think we do things differently. So when we started this, no one had ever tested this mechanism in Parkinson's before. So we look at a generalized population and we did this open label so obviously, we could titrate up and look at tolerability and things of that nature. And what we found, again, we could do it rather quickly, that the patients who were tremor predominant were the ones who seemed to get the benefit. That allowed us to quickly pivot into this second trial that you're alluding to, also open label, as adjuvant therapy for patients on their background medicines who have tremor predominant Parkinson's. Now that gives us a signal. We will then take those data and what we've learned from it, much as what we've done with PPD, as we did with tremor, as we did with SRSE, and at that point use those data methodologically to help us design what we hope will be an efficient Phase II program hopefully in tremor predominant patients with Parkinson's as adjuvant therapy. But I think it's important to point out that this is the nature of why we think we have a differentiated development approach. By doing these small, what we hope are methodologically appropriate open label studies that give us interpretable data, that then allow us to design efficient Phase II programs.

Do you have a clear hypothesis on the mechanism of action modulating GABA activity for tremor in Parkinson's disease patient? I assume it's probably -- the tremor is probably different from essential tremor.

It is distinguished and the theory of that, that's probably beyond a conference call, but there's a fundamental theory that there's the neurons in the substantia nigra that degenerate in Parkinson's downstream are enervating GABAergic neurons. So there is a fundamental GABAergic deficiency. So that in theory, you can anticipate that positive allosteric modulation might be beneficial. How that conflates with the path of physiology in essential tremor, I think is not clear yet, and I think some of the clinical data may in fact shed light on that.

A question on the NMDA program if I can. So have there been any changes regarding the indication that you want to pursue upon positive data from the Phase I study?

In terms of indication? I think the NMDA program, I think, is a one of a kind program at this point. So we're still learning about the molecule and the mechanism. I think it is fair to say that the team has done a good job exploring a universe of potential applications. So on the narrower side, I think we've discussed data already for Huntington's Disease. There's some other rare diseases that we've noted. I'm not sure we've articulated them where this mechanism may be amenable or useful therapeutically. On the larger market size, there are biomarker data across a number of large populations where an NMDA positive allosteric modulator might be useful. These include Alzheimer's disease, schizophrenia, and even ADHD. All of these populations may have biomarkers that render them amenable to NMDA modulation. So we'll be looking at those development opportunities once we clear the Phase I program. But I have to emphasize, we're very excited about the 718 program. It's a first in human program of its kind and we think it opens up a broad new range of possibilities for the company.

And our next question comes from the line of Danielle Brill with Needham.

I'm just wondering with the timing of SRSE and PPD results being closer than originally anticipated, how are you thinking about your go to market plans?

The commercial team has been quite busy, as you can imagine, and thinking about the sales force, this is just one piece of what they've been doing. Let me give you a little background at what they're thinking. One of the things we've been talking about for some time is that we need a small hospital based salesforce for SRSE. So that's a small force of that 100 or so reps. With regards to PPD, initially, we can leverage the SRSE salesforce in the hospital setting, but the team will continue to build out a specialty side salesforce that they'll use for the outpatient setting.

And then can you just comment qualitatively on how enrollment is going in the other 217 programs, the PPD and essential tremor?

They're all on track still for reporting out this half of the year. So we're going to have a very busy half.

Our next question comes from the line of Carol Werther with H.C. Wainwright & Co.

I was also wondering about the commercialization of PPD and exactly are you first going to focus on inpatient PPD patients in the EU and the U.S. and how many centers are there like that? And then where do you target next and can some of these patients be treated outside the hospital setting?

Thanks for the question. Right now, our intent is to make the 547 available as broadly as possible with approval and we don't anticipate the label will be restricted. One of the things that we're looking at is how the patient's own social situation and how the patient's severity of illness might determine the locale of care. So we are looking at inpatient units. There are a number of units around like that. We're also in discussions with home infusion companies and there's several companies of that nature who are very interested and eager to work with us to help us make the drug more broadly available. I think it's premature to go beyond that in terms of our actual logistics, but sufficed to say, our intent is to make it broadly available as quickly as possible. I would make a slightly technical comment as well and that is that the drug itself is easy to administer. It's not sclerotic. It's given at low volumes so it would not be difficult to administer either at home or in a day hospital. So those are the things I just want to mention. But right now, our intent, just to summarize, is that we believe that we'll be able to make it available not only in hospitals but through other venues as well.

Okay, and then if you wouldn't mind, how many employees do you have now and how many do you plan to have in, say, the next year as you approach commercialization?

So currently, we're about 200 employees and certainly, we take a very disciplined approach to how we add our headcount going forward. And so that will really depend on the milestones that we achieve.

Our final question comes from the line of Laura Chico with Raymond James.

I think most of my questions have been answered here but just one last one. I guess obviously, the second half is a busy time of year for you guys in terms of readouts. How should we be thinking about specifically the Phase II readout for 217 in PPD and I guess kind of comparing that to 547 in severe PPD? What does success look like for both of those? Is the benchmark different? Any color you can provide there would be helpful.

We're obviously hoping for a similar magnitude of effect with SAGE-217 and as you might expect. So beyond that, I'm not sure what else I can say. I think the course of therapies will be a bit long, as you know, from the design of the trial. And some of this is going to be learning for us is what the duration of an oral therapy might be required. But in general, our hope will be because we know 217 is well absorbed, and we know that it has been very well tolerated, our hope is that we will see a magnitude of effect that is somewhat in line or in line with what we've seen in the intravenous data so far.

One follow-up to that too. As you're thinking about all of these readouts, how are you considering prioritizing what advances next? Obviously, there's a lot of puts and takes I realize. But is there any possibility that the Phase II MDD study right now could be a registrational study? And apologies if I missed that earlier.

I didn't comment. I think it's premature to speculate. We think the study in size and design will certainly be a supportive study. A lot of it will depend on the MDD study and the nature of the data obviously, durability of effect, tolerability, and things of that nature. Most people think of depression based on the old style of program where you're looking for 3 or 4 points on the HAM-D. You have to overpower a study, et cetera, et cetera, and you're dosing for safety with a chronic oral therapy being administered over 6 months to a year. 217 may be distinctly different from that so I think it's premature to speculate how much more of a compact study requirement we might be able to achieve with that molecule. With respect to prioritization, we anticipated or at least planned for success with these trials. And I think one of our core beliefs is that each of these indications that we're focusing on or upon which we're focusing, represents potentially important groundbreaking treatment for diseases that are really in need of new therapies. So for example, if essential tremor is positive or Parkinson's is positive, we believe that we can accommodate those development programs moving forward. So I think from the standpoint of prioritization, we're good for success with what we've had today. I think over the ensuring years, though, for example with SAGE-324, we'll be looking at other opportunities and prioritizing there as we introduce new indications for our newer molecules.

This does conclude today's Q&A session. I would like to return the call to Mr. Jeff Jonas for any closing remarks.

Thanks again and thank you everybody for your attention today. I want to again thank the team at Sage for all the great work that they've done this year and for getting us to the point where we have these multiple data readouts for this half of the year, which I think should be transformational for the company.

So we're all looking forward to seeing the data. I know I am and I want to thank everybody for your attention on the phone and I look forward to speaking with all of you in the future. So thanks again everybody and have a great afternoon.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone have a great day.