SAGE Therapeutics Inc (SAGE) 2018 Q3 法說會逐字稿

Good morning, and welcome to Sage Therapeutics Third Quarter 2018 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 and transmission of the 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, Investor Relations at Sage.

Good morning. Today, we issued a press release with our third quarter 2018 financial results along with recent company highlights, upcoming milestones and progress on our corporate strategy. The press release referenced on this call can be found on the Investors & Media section of our website at sagerx.com. We will begin the call with prepared remarks by Dr. Jeff Jonas, Chief Executive Officer; Mike Cloonan, Chief Business Officer; and Kimi Iguchi, Chief Financial Officer. We will be joined for the Q&A session by Dr. Steve Kanes, Chief Medical Officer, and Dr. Jim Doherty, Chief Research Officer.

During today's call, we will make forward-looking statements, including statements about the potential for approval of the NDA for a proprietary formulation of brexanolone and the expected timing of a decision; our commercial launch plans and expectations; our planned regulatory activities in the EU; the potential for accelerated development of SAGE-217 in depression; our plans and expected timing for our clinical development and regulatory activities; our reviews as to the potential of our business and our current and future product candidates; our prevalence estimates; our financial projections, including our cash runway; and our expectations regarding other upcoming events and activities. 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 Factors section of our most recent quarterly report 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, and good morning, everyone. And thank you for joining us today on our call. We're excited to discuss another productive quarter. And we continue to make progress across our entire portfolio of differentiated medicines. I will walk through the major updates on the call today.

As many of you know, our lead product candidate, ZULRESSO, or brexanolone injection, is being developed for the treatment of postpartum depression or PPD. On Friday, the U.S. FDA held a joint meeting of the Psychopharmacologic Drugs Advisory Committee and the Drug Safety and Risk Management Advisory Committee to discuss the safety and efficacy of ZULRESSO or PPD. We're pleased with the new unanimous vote on the benefit-risk profile that supports the approval of ZULRESSO. This positive meeting outcome is an important milestone in the development of this potential new treatment for women, who are suffering from PPD.

In the meeting, there was clear recognition by the advisory committees that PPD affects not only the mother, but also has significant impact on her infant and family, and that there is an urgent need to provide an innovative treatment that rapidly alleviates the symptoms of PPD. We believe that ZULRESSO, if approved as a onetime infusion, could potentially transform the treatment of PPD, the most common complication of childbirth, by potentially relieving symptoms within days instead of weeks or months.

More broadly, we believe ZULRESSO may set the stage for rethinking how psychiatric disorders are treated as illnesses rather than chronic lifetime conditions. The joint committee based their recommendation on the safety and efficacy data from 3 placebo-controlled clinical studies, where we demonstrated that ZULRESSO rapidly resolves symptoms of this critical disorder in just 2.5 days. These detail results, including the safety data, were recently published in The Lancet.

Michael will further discuss the outcome of the Advisory Committee meeting, our commercial launch plans and expected pricing for ZULRESSO on the -- next on the call.

We look forward to working with the FDA as it completes its review of our New Drug Application, which has been accepted for priority review with the PDUFA target date of December 19, 2018.

But before I turn it over to Mike, I'd like to briefly review the rest of our pipeline, where we continue to make important progress across programs. For our lead oral program, SAGE-217, we continue to advance this novel compound in a number of psychiatric indications, including our Breakthrough Therapy designated program in major depressive disorder or MDD. Similar to the ZULRESSO, SAGE-217 has the potential to transform how these disorders are treated, as we explore the novel concept of episodic dosing using a short course of treatment in our studies. For our Phase III trial of SAGE-217 in PPD, we recently completed enrollment in the study and now expect top line results in January of 2019.

We are also in the process of initiating multiple Phase III trials of SAGE-217 in MDD, including the placebo-controlled efficacy MDD study, a placebo-controlled polysomnography trial in MDD patients with comorbid insomnia, and a Phase III long-term open-label retreatment trial in MDD. We've also recently initiated dosing of patients in an open-label Phase II clinical trial evaluating SAGE-217 treatment in up to 30 patients with bipolar depression, with top line data expected in the first half of next year.

Turning now to our earlier clinical programs, SAGE-324 and SAGE-718, both are progressing in Phase I. SAGE-324 is being developed as potential treatment for patients impacted by neurological conditions, such as epileptiform disorders, essential tremor and Parkinson's disease. Our Phase I single-ascending dose trial in healthy volunteers is ongoing, with plans now to include this quarter, and we now plan to initiate a multiple ascending dose study also this quarter.

For SAGE-718, our lead NMDA program, we have completed the healthy volunteer portion of the Phase I multiple ascending dose trial and have initiated target engagement biomarker studies, focusing on electrophysiology and imaging to evaluate SAGE-718 in healthy volunteers. We are also considering plans now to evaluate SAGE-718 in a patient cohort to be disclosed to further study the safety at PK/PD profile of SAGE-718.

Before I turn the call over to Mike and Kimi, I would like to close by reiterating our focus on transforming the lives of people with life-altering central nervous system disorders. Our first program in PPD exemplifies this philosophy. If approved, ZULRESSO has the potential to address the unmet need of these patients, and to be an important new tool that physicians can use to ease the burden of this disorder for patients and their families. We aspire to define a new normal for brain health, and with the ZULRESSO in PPD, we're just getting started.

Now I'm going to turn the call over to Mike. Thanks.

Thanks, Jeff, and hello, everyone. Thanks for joining our call today. We're very pleased with the positive outcome of the Advisory Committee meeting on Friday, and we'd like to thank the speakers during the open public forum for the courage to share their stories and for their support to change the course of this disease. We continue to execute our commercial strategy for a potential launch of ZULRESSO in PPD, if ZULRESSO is approved, and we expect to be scheduled by the U.S. Drug Enforcement Administration, or DEA, consistent with other approved GABAergic therapies. The DEA is required to issue an interim final rule controlling the drug within 90 days of approval. As a reminder, the PDUFA target date for an FDA decision on approval is December 19, 2018.

Our preparations continue for a potential U.S. commercial launch of ZULRESSO in late March 2019, if the FDA (sic) [NDA] is approved and post-DEA scheduling. Based on the Advisory Committee meeting and our discussions with the FDA, we expect to implement a REMS program if ZULRESSO is approved. We expect the REMS program will require administration of ZULRESSO and monitoring by a qualified trained staff in a health care setting that has been certified under the REMS program. The details of the REMS are still under discussion with the FDA. The associated patient registry will provide important ongoing safety information to further characterize the risk of loss of consciousness.

As a onetime infusion, we believe ZULRESSO has the potential to transform the treatment of PPD. Our goal is to create options for women with PPD and their families and health care providers with the appropriate sites of care for ZULRESSO to be administered, subject to the REMS criteria. If ZULRESSO is approved, we expect to launch to initially focus primarily on centers of excellence in the inpatient hospital setting, with a focus on severe diagnosed PPD patients, which we estimate represents 20% to 30% of all diagnosed patients with PPD. We believe these centers of excellence will have a combination of provider champion, payer access and infusion capabilities and supervision consistent with the REMS criteria. We are also actively evaluating other health care settings as sites of care using the proposed REMS criteria with the goal to establish them as certified sites of care as quickly as possible subject to the final label. As we expand sites of care options to other health care settings aligned to the REMS criteria and health care providers gain real-world experience with ZULRESSO, we believe we have an opportunity to expand treatment beyond the hospital setting and to enable administration of ZULRESSO to more women with PPD who are in need of this treatment.

For the home setting, we do not expect to have home infusion as an option at the time of launch, and we will work with the FDA to discuss the potential path forward for home infusion in the future. We expect to give further updates on the progress of establishing potential sites of care on future calls. We would also like to provide information on our potential pricing for ZULRESSO, if approved. As we have always said, our pricing strategy is focused on the clinical value of ZULRESSO and the high unmet need in PPD. We have had extensive engagement with payers over the past several months, and we believe we have initial price range that reflects the clinical value of ZULRESSO and the transformative and innovative profile of the product. We currently plan to establish a price within the range for the effective average list price per course of therapy of $20,000 to $35,000. It is important to note that ZULRESSO is not a chronic treatment by contrast to most other specialty CNS drugs.

Sage is committed to helping women diagnosed with PPD access ZULRESSO. We are currently assessing potential patient support options to help lessen financial barriers to access for women with PPD in need of treatment where appropriate and permitted. We plan to disclose the final list price in more detail on our patient support program at PDUFA once we have the final label. Sage is excited about the potential approval of ZULRESSO in December, and we look forward to communicating the FDA's decision. If approved, we plan to host an Investor Call to provide more details on the commercialization plans for ZULRESSO.

We also have a brief update on the status of development of brexanolone for the EU. Sage is continuing discussions with the European Medicines Agency to determine the potential regulatory pathway for a marketing authorization application filing for brexanolone in the treatment of PPD. Sage plans to seek additional scientific advice to help determine what additional data or information will be needed prior to filing as is permissible under the PRIME designation program.

Before I turn over to Kimi to cover our quarterly financial results, I would like to say that we are very excited about the company's progress to date this year, and we believe we are well positioned for our first commercial launch in late March 2019, if ZULRESSO is approved. We now have a sales team of a 180 employees, an additional field team build is pending approval and the final ZULRESSO label. We've also completed the rest of our commercial build, including our patient support team, in Raleigh, North Carolina. I look forward to providing further updates on our launch plans and on the PDUFA call in the quarters ahead.

And now I'll turn it over to Kimi to review our financials.

Thanks, Mike. Let me now walk through the financial results and guidance. Beginning with the income statement, research and development expenses increased to $75.1 million in the third quarter. This is compared to $58.3 million for the same period of 2017. This increase reflects ongoing R&D programs and discovery efforts focused on identifying new clinical candidates and additional indications of interest to deliver on our goal to be a multiproduct company. We've expanded our R&D team to support the growth in Sage's pipeline and operation. These increases were partially offset by completion of the Phase III clinical development of ZULRESSO.

General and administrative expenses increased to $53.7 million in the third quarter compared to $16.1 million in the same period of 2017. This increase is a result of the continued investment in the preparation for the potential commercial launch of ZULRESSO, and the ongoing build and expansion of the organization and operations. We reported a net loss in the third quarter of a $122.9 million compared to a net loss of $73.7 million for the same period of 2017.

Turning now to the balance sheet. We continue to be well positioned with $1 billion in cash, cash equivalents and marketable securities at the end of the third quarter compared with $518.8 million at the beginning of the year.

For financial guidance, based on our current operating trends, we continue to anticipate that our cash balance will enable Sage to fund its operating expenses and capital expenditure requirements into 2020. We expect that our operating expenses will continue to increase year-over-year and quarter-over-quarter best to support the ongoing investment in the portfolio and potential product commercialization of ZULRESSO and PPD. We will continue to focus our disciplined, cost-efficient approach to drug development, allowing us to focus on the execution of critical activities across our diverse pipeline, setting us up well across near and long-term opportunities.

We're pleased with our progress to date as we continue to focus on building a multinational biotech company in the field of CNS drug development. We look forward to a number of near-term milestones across our portfolio. For ZULRESSO, following our recent Advisory Committee meeting, we now look ahead to potential approval with a PDUFA target date on December 19, 2018.

We continue to plan for a potential commercial launch of ZULRESSO and PPD in the U.S. in late March 2019, pending approval and DEA scheduling. We also expect several important milestones for SAGE-217. We expect to begin enrolling the Phase III clinical trial in MDD and the trial in MDD patients with comorbid insomnia this quarter. As discussed, we now expect top line results from the Phase III placebo-controlled trial of SAGE-217 in PPD in January. And now that the open-label Phase II bipolar depression study is enrolling, we anticipate top line results in the first half of 2019.

Turning to the earlier pipeline programs. We continue to evaluate the safety, tolerability and PK/PD profile for SAGE-718 and SAGE-324 in Phase I studies. We expect to announce next steps for these programs in the first half of 2019 following completion of Phase I work in both programs. We're pleased with this continued progress across the entire portfolio, and believe execution against our upcoming milestones will position us well toward our goal of becoming a multiproduct multinational biotech company.

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

(Operator Instructions) Our first question comes from Edward Nash of SunTrust.

This is Nat Charoensook on for Edward Nash. So the first question is, can you share any initial thoughts on additional studies you plan to conduct to support home infusion option for ZULRESSO?

First, thanks, everybody, for dialing in today. This is Jeff Jonas. I think what we heard from the committee overall was that the -- and the FDA was that they view that as a public health interest and making -- allowing access to care and making ZULRESSO, if approved, as broadly available as possible, given the severity of postpartum depression. And I think anyone who listened to the AdCom and patient stories could not help, but been profoundly moved by the suffering that these women have. With that said, I think, the first step is going to be to work with the FDA to finalize the REMS that we believe will help make sure that patients can be adequately monitored in the same fashion in the current certified health care settings. Beyond that, we expect that, as you heard the FDA and from the question, we will have discussions. We don't know yet what they will be about what data might be required to move this further into the home setting.

Yes. I think -- this is Steve. I think the key piece of it -- and this is where we are in terms of planning so far is the registry will be very important in helping understand an increasing number of patients treated. So where we are at now is getting that underway, as Jeff said, and really getting a lot of patients treated. That will help us move the bill -- law forward for home infusion as well.

Got it. And the second question is in the previous files or the ongoing ones, did patients receiving 217 experienced any severe sedation or loss of consciousness?

This is Jeff. You all have seen the data from the clinic -- from the studies already. It has been public. There have been no losses of consciousness in the study that had been analyzed to date. Just remember, this is GABAergic agent, people will get sedation. And in fact, as you saw, from the sleep study, 217 is a very active sleep-inducing agent, but no loss of consciousness.

Our next question comes from Salveen Richter of Goldman Sachs.

With regard to ZULRESSO, I think you just announced a price of $20,000 to $35,000. Can you just help us understand how you came to that range, and how it measures up versus other specialty CNS drugs out there?

Yes, Salveen. This is Mike. I'll take that one. So listen, we tried to take a very thoughtful approach to our pricing strategy. And we thought this was a good time to announce that range. And as we always said, we want the pricing to reflect the clinical value of ZULRESSO. And as Jeff already mentioned, we saw that in the AdCom, in the open public forum, the high unmet need that exists for patients with PPD, and ZULRESSO has the potential to be the first product approved for this disease. So we wanted the pricing strategy to reflect that. In terms of the work that we did to support that, we've done extensive work to support that range of the $20,000 to $35,000, including engagement with payers. We've had over 200 engagement with payers over the last several months to understand what their needs are. We've done extensive pricing research as well, and we've also engaged external experts to validate some of the modeling that we've done. So we feel very confident in this range. And again, most importantly, we feel this will reflect the clinical value of ZULRESSO.

And then you talked about the initial focus being on the centers of excellence in the inpatient settings here and that accounts for about 20% to 30% of all diagnosed patients. How has your preparation work been playing out in your touch points with these specific centers? And how should we expect uptick to proceed here? Would you expect them to treat one patient, monitor and then bring in patients over time? Just any color there would be helpful.

Yes, I think, as we've said, Salveen, in the past, we want to have as many sites of care options as possible for patients. That has always been the strategy for us, right? And the first question was about home infusion, and we think there is a path forward in the future by working with the FDA, but we think the first place to start with ZULRESSO is going to be in these centers of excellence because of the combination. We think they will have provider champions there, payer access, infusion capabilities, and they'll be able to meet the site of care qualifications of the REMS, and they'll have those capabilities. We've done a lot of work already in planning for these sites of care. We've profiled over 600 centers to this date. We've got a very talented key account management team that has been out there along with our MSLs. We feel very confident in our ability to look -- to identify these sites and bring them online as quickly as possible.

Yes. This is Jeff. There's one other additional point. I think, one other point, I think Mike's team -- we're very comfortable, and we're ready to do this. I think the other point to make though, and as all of you follow the industry, especially CNS know, when you have a disease that has not been treated where you have the introduction of the first-ever treatment that, we believe, is truly transformational, that you will see increased patient flow to the centers that are offering those kinds of interventions.

Our next question comes from Paul Matteis of Stifel.

Congrats on the positive Advisory Committee meeting. Just one other question on the loss of consciousness events. Jeff, I was wondering if you could talk about kind of what's happening underlying those events from a PK/PD perspective? It seems like the FDA didn't think that this was dose related, and so I was wondering if we could extrapolate the safety dataset from the IV onto the oral. You haven't seen it with the oral yet to date, but how potently are you hitting synaptic and extrasynaptic GABA receptors with 217? And is there a reason to believe that you got a real window there and not see any safety issues as severe as that with the oral program? And then I just have one follow-up.

That's like dreamball. Couple of points. I think one is there are no loss of consciousness events in the 217. And there are sound pharmacologic reasons for that, but -- and I'm going to let Steve and Jim to comment on that. Just -- and an overarching commentary, infusion data, our -- we have more rapid Cmax and more rapid Tmax are not transmissible to oral data, I mean -- and you know that and we all know that. So it's not surprising at all that the 217 data looked distinctly different. Secondly, when you look at, I think, as we all watch -- we'll, obviously, watch the AdCom, what we saw were these reports of extreme sedation that were quoted as loss of consciousness, or were, really had precedent -- had antecedent events. The patients complained, they had sedation, and these are all, I think, the point where representative have exaggerated a pharmacology very predictable. Finally, I think we're very excited that you have to step back now and make the commentary that (inaudible), obviously, began, if you watch the AdCom, really discussed this thoroughly and in discussing this and looking at each patient individually. We're very comfortable that, firstly, this is -- these are known events, and secondly that they can be more than adequately monitored with the REMS program that you've heard about. So I think, 217 -- we don't think there's much read-through to 217, there hasn't been. And I'm going to turn this over to Steve for any further commentary.

Yes, I think Jeff laid it out well, Paul. I think the main part for 217 is that it's an oral drug. It does take time to absorb. We know that uptake is important. And that's why -- that's how it was designed. It was designed to be an oral molecule to have a long half-life, once a day and so forth. And so the pharmacology, while potentially sedated, and we've seen that both in the MDD trial, that is of potential benefit for patients as we know that often they have sleep disruptions, and we've been exploring that in our sleep study as well. So the features that we're looking at are designed into the molecule and ones that we've following very closely.

Okay. That's really helpful. And just one quick question for Mike. On the PPD launch for ZULRESSO, how is reimbursement going to work in the hospital for the first year or 2? Do you expect this to go through a DRG? Or is there another kind of exemption process that's going to make sense here?

Paul, it's Mike. So there will be multiple pathways, right? We've done a lot of work on this as well, and we're getting comfortable that there'll be multiple pathways to reimbursement in the hospital setting. So DRG will be one of those, but there's also an opportunity for each hospital to negotiate case rates or carve outs to existing new technology that comes online. And this is something that's happened over and over again with new specialty drugs that have come into that space. So we feel confident that with the high unmet need that exists with PPD, the level of support that we think physicians are going to demand for this -- for those pathways to reimbursement will open up.

Our next question comes from Cory Kasimov of JPMorgan.

Congrats on the results of the AdCom. This is Chuan on for Cory. So 2 questions from us. First, so appreciate the color on pricing. But when you guys are having both an IV and an oral potentially approved in the same indication, how do you imagine the pricing dynamics will play out between the two? I wanted to recourse on SAGE-217 and see a comparable price for treatment course as the IV, especially when you consider that 217 could eventually be approved for a larger population of MDD patients? And I have one quick follow-up.

Yes, so this is Mike, I'll answer that one. So in terms of the pricing and how we think about 217 and the interrelatedness for ZULRESSO, you have to price them independently first, right? So we've stated our range today for ZULRESSO. We feel confident in that range. But it's too early to say what the pricing is going to be for 217. But the things that we think about for 217 are going to the same thing. They open a product profile, the high unmet need that exists in MDD. And I think similarly, this profile is going to be beyond its multiple indications. So our pricing has to take into consideration the multiple indications of 217, not just PPD. So I think that's an important differentiator we have to think about. So I think our pricing strategy will continue to be very thoughtful, and we wanted to reflect the clinical values that will be no different on 217. But really the difference I see between the 2 products is the multiple indication, the large market size of MDD and how we think about pricing for 217.

Okay, great. And then sort of switching gears a little bit. So in terms of the actual molecule, SAGE-217 versus brexanolone, kind of in layman's terms, can you guys tell us, again, how they are sort of similar or different chemically? And what gives you confidence that the different time cohorts of exposure between the oral and the IV formulation should give you a similar magnitude of the fact that it still relates to PPD?

Yes, this is Jim. I think the simple answer to the question is that brexanolone is an endogenous molecule. And so what we're looking to try to do with SAGE-217 is to not modify the pharmacology, but modify the profile, so that it would be orally bioavailable with a longer half-life. And so the changes to the molecule were for that purpose.

Our next question comes from Gary Nachman of BMO Capital Markets.

This is (inaudible) on for Gary. Can you describe the Phase III polysomnography study for 217 in MDD with comorbid insomnia? How many patients will enroll? How soon could we see the data? And would you look for this to be supportive of the depression indication for 217, or as a really separate indication for sleep disorders? And then I have one follow up.

Yes, we had a little hard time hearing you. But it sounds like the MDD polysomnography study, well, we can talk about in broad strokes until we enroll, and basically it'll be a classical PSG study in patients who have insomnia along with the comorbid diagnosis of major depressive disorder. We anticipate we will have a polysomnographic data along with a patient-rated outcome to assess that. There'll be some other biomarker data that we'll obtain, but that's not disclosed. I'm going to turn this over to Steve for a little more color on that.

Yes. The dosing scheme will be similar to what we used in the MDD trial, which was the 30 milligrams, and which they're looking to see whether we include other doses. And we'll be doing polysomnography at the beginning and the end of the trial to look not only at improvement of symptoms in depression, but also to see if those correlate with independently with improvements in sleep. So it's looking to, in a simple way, merge what we've seen with the MDD trial and what we've seen in the open label -- in the proof-of-concept study to see if we can demonstrate the benefit of sleep in patients with major depression.

Great. And can you also talk about the initiatives you put in place to improve awareness of PPD?

Yes. So this is Mike. So we've already started some of the disease awareness activities on postpartum depression. We think we have a unique opportunity as we set to change the paradigm in PPD. And that really first starts with, as Jeff already mentioned, shifting the conversation and reducing stigma. That's a big part of the barrier that exists for patients today. And so our disease awareness campaign, that we have started and we'll continue to do, will focus a lot on the stigma and increasing awareness for PPD.

And our next question comes from Tazeen Ahmad of Bank of America.

Jeff, I just wanted to get a little bit of clarity on the 217 PPD study. Would the positive results in any way accelerate the plans that you have for your MDD filing? And then consequently if on a small chance that the study doesn't work, how does that impact your Phase III plans for MDD?

Okay, thanks for the question. So I think the -- we're not sure how to say this, I'm not sure there's a lot of reason either way. Obviously, we're optimistic about the study. We're optimistic -- same as last words, but we are. It's enrolled very well with significant interest. I think it's premature. I think we probably can't speculate on what will happen if there's no outcome if the outcome -- it doesn't meet our hopes. But clearly, the MDD study moves on with or without the PPD. We'll, obviously, think about that strategically. I would say that we believe that we would need to file both the PPD and the MDD study along with the first positive Phase III program in order to accommodate a file or an approval and that's -- that remains our plan.

Okay. And what's your expectation for rate of enrollment for MDD?

It's -- again, we don't know what we have in that. That's always how we figure out our time line as we open up sites and do enrollment and such. Our experience today with all of our trials, as you've seen, is that we've had a lot -- we've had -- our clin ops team and the medical team has not experienced major difficulties in enrolling. There has been substantial interest in our trials. And so hopefully, that will be the same for MDD.

Our next question comes from Brian Abrahams of RBC Capital Markets.

Congratulations on the positive panel. Question on brexanolone. I guess, can you quantify at all just the -- what you see as the capacity for patient throughput at the inpatients sites of care that you expect to target with the initial launch? Like do you have any sense of just approximately how many patients might be able to be treated at launch before the sites burn out? And then I have a follow-up on 217.

Yes. So Brian, this is Mike. And I think step back a little bit because, I think, that we've said all along is the inpatient setting is, we think, could be the place where it starts initially, but as we've said all along it really is about creating as many sites of care options for patients as we can, right? What we want to do is align for the FDA and the commentary they had at the AdCom, which was to make this as broadly accessible as possible to patients. So we feel that with these centers of excellence in the hospital setting, we feel like there'll be that initial uptake. We've seen a lot of feedback that we received from providers that there's a lot of championship out there and their willingness to pull this through into the hospital setting. But over time, we want to bring these other sites of care online so that there isn't an access issue that you're referring to.

Got it. That's very helpful, Mike. And then -- sorry, if I may, just a question on 217. Given that the peak broad levels are probably occurring overnight when folks are sleeping, I would imagine that it would be unlikely you would see syncopal events, but I guess, I'm curious if you've seen any apnea or reductions in oxygen saturation with 217 in any of the studies you've reported on any ongoing or ancillary studies? And if you were to see a syncopal event or vasovagal event, do you have any sense from regulators on how this might be handled and followed up just given some of the questions that were raised on the panel and the similarities in class versus brexanolone?

Well, okay, thanks for the question. Certainly, they're distinctly different as Steve pointed out. Oral molecules don't act like IV infusions. Secondly, we did give the drug during the day, during the Phase I program. There were no loss of consciousness events. Third, as Steve pointed out, being able to get a sound night sleep is a benefit in psychiatric disorders. So again, we just haven't seen it. The drug does have a predictable pharmacology, which is a benefit. And I think it's important to remember that the drugs that we're testing are powerful drugs. They have an effect on calming the brain and restoring balance and that makes -- unlike all drugs, they have a risk-benefit. The good -- what we think is the good news with what we saw with brexanolone is that even with an IV infusion when we did have the reported loss of consciousness events, the FDA almost unanimously agreed that the risk-benefit makes sense, given the severity of the illnesses that we're treating. And I'll just say one other comment and this is me being a recovery psychiatrist. I think that we haven't put this in perspective. These are women who have -- and people with depression have potentially life-threatening disorders. So we should treat them like life-threatening disorders and think about risk-benefit in that nature, not simply assuming that these are psychiatric patients, who can wait and things of like that. We're very excited about the potential of these drugs and the life-changing quality that they may confer on treatment. So I think, we have to put the step back and put this in perspective. These are predictable pharmacology. The team at Sage has done a great job designing these molecules to have very few off-target effects, and that's what you're seeing. And I'm going to let Steve add a little bit more color.

Yes. Just the other piece of this is it's not only the benefit-risk in terms of the very rapid improvement we've seen in patients with both ZULRESSO, but also with 217. But a key feature of the program with 217 is to treat patients when they need it and not when they don't. And just to remind you that in our clinical trials, we're seeing -- we're testing 2 weeks of treatment and that seems to really result in complete -- in many patients, a reduction in symptoms. So all of that feeds into the overall assessment of benefit-risk.

Our next question comes from Laura Chico of Raymond James.

I just wanted to clarify. I think I probably missed the first question. How many sites of excellence do you anticipate will be ready to certify at launch for a potential REMS program? And then a little bit separate, but I just also wanted to clarify on the EMA filing. You've got scientific advice already and you're trying to understand what the additional studies are for ZULRESSO before you file? I just wanted to understand the European situation.

Hey, Laura, this is Mike. I'll take the certification and the centers of excellence. So what we've said is that we want to broaden out the access to patients, right? We want to create as many opportunities inside the care as possible, specifically with the centers of excellence. Our team has done a great job already, they're profiling many of those accounts. Over 600 have been profiled to date. We'll continue to do those profiling. Now we know we'll have the criteria for the REMS at the PDUFA, so we know what the certification process looks like. So it's too early to say how many will be certified at the time of launch, but we will provide more updates along the way once we have those numbers.

Yes -- and this is Jeff. With respect to EMA, we have -- we're under 2 procedures, which is that in PRIME consideration. So we had ongoing discussions, and we're -- it's not a question of additional studies per se, but what the final requirements will or won't be and those discussions remain ongoing. And it's been our policy, we don't typically comment on ongoing discussions until we have finality. So that's basically the situation there.

Okay, got it. If I could just sneak in one quick one. I don't think this was asked. But the PPD readout in January, I just wanted to make sure, how should we be thinking about, I guess, the bar for efficacy? Now it's ZULRESSO getting support at the Advisory Committee. Is that the bar for success in terms of the magnitude of benefit?

Thanks, Laura. Basically, we have a primary endpoint and a secondary endpoint. I think it's pretty conventional. One of the things that we've done at Sage, and I think that was pretty clear from the Advisory Committee, again, stepping back, we try to design our studies in a straightforward manner with clear endpoints with -- at a side that we can give clear answers. So I think you're looking for stats, say, on the hand -- at the primary and, obviously, on the secondary. Hopefully, we'll see something that we saw like in MDD. Again, the question is going to be significant. It's a larger study, and we'll just have to see. But right now, we're cautiously optimistic.

And maybe one thing to add -- hey, Laura, just one thing to add to that too on a commercial perspective, too, I think, is that we feel fortunate to have multiple options for PPD, right? As we've talked in the past so much about the unmet need, ZULRESSO has the potential to be the first product approved. If we're fortunate to have 217 come as well, we have options for patients, we think, is unique and a great opportunity not only for us, but for patients and moms and families.

Our next question comes from Ritu Baral of Cowen.

I want to round back to 217's sedation signals. Specifically, you guys presented a multiple ascending dose study at AAN last year and you used the MOAA sedation scale. Can you characterize sort of the deepest level of sedation that was seen in that healthy volunteer study, and how arousable these patients were, I think, that's part of that scale? And is that scale going to be incorporated into your Phase III program to proactively head off sedation concerns?

So that was with -- also on oral suspension, which replicates more of the IV than the capsule, so that's number one. The MOAA scale really is the level of sedation and the problem, as you heard on the AdCom, is that it's not basically never need to be given during the day. So at night, obviously, you're going to take that up because people are getting a sound sleep. But I'll let Steve turn that over -- I'll turn it over to Steve, rather, to give you more answer to that.

Yes. And thanks for speaking to that. That was our endpoint for stopping of dose escalation. And of course, as we talked about before the GABA pharmacology when given to appropriate doses and high enough doses, will, of course, cause sedation. As soon as we started to see patients fall asleep, we knew that we had reached a point where there was no point in additional dose escalation. So those patients were arousable, they were asleep. But that was the endpoint, and we didn't see any other safety signals of nerve in our dose escalation studies. We're -- the doses that we use, as Jeff said, were in solutions, so they had different pharmacokinetics than the formulation, which is a capsule that we're using now. And we really have -- are dialing in now, our understanding of our overall risk profile through the clinical trials when dosed in patients in our clinical trials as well as in sleep study.

So are you using that MOAA in the Phase III MDD or are you going to be able to check for arousability in the polysomnography study? It seems kind of similar to...

People on polysomnography studies are supposed to be asleep. So by definition, we don't wake them up. And so -- and the MOAA, that's really an anesthesia scale that's used during the day. It is not applicable. And again, let's take this back up and talk about what we see in clinical trial with 217, and there is no loss of consciousness. Side effects are predictable. We are not seeing off target. These are very well-behaved, very well-tolerated molecules that have shown significant benefit, both in PPD and MDD, with a very overall benign side effect profile compared to what's available right now.

But you're measuring next day grogginess, et cetera, in these trials?

We measure all sorts of things in the study, not all of which we disclose. But you can be sure that our Phase III programs will assure safe -- patient safety as well as efficacy.

Fair enough. The second question is on Phase II PPD and the placebo effect. Can you remind us how that trial is powered? What placebo effect you are expecting? There was a comment at the panel that the -- from Meltzer-Brody that the brexanolone Phase III Hummingbird placebo effect was not real. Should we not use Hummingbird as a guide for placebo? Is it going to be more Phase II MDD like? How should we think about powering in placebo?

So we don't specifically talk to the powering for clinical trials. But we do understand from all of the work that we've done with both brexanolone and 217, what we expect to see from the efficacy side and we power against that. Typical for studies in depression, we know that placebos vary, and we take it into account as we power the studies and make sure that they are adequately powered to be, in this case for the PPD trial, registration quality.

But do you think PPD placebo is going to more MDD like or more like what you saw with Hummingbird?

Nobody knows. Remember, this is the first time in history someone has done oral study for postpartum. So we make our best guess. We've been very successful in all our studies to date, knock on wood, and we have a great clinical team. We look at the data. We looked at our early data, and we power up appropriately. But until we see the data, I think, we can't speculate.

Our next question comes from Tim Lugo of William Blair.

I just wanted to clarify a previous answer. Is it your current thinking that PPD and MDD were deemed the same filing for 217? And you have the MDD insomnia study, obviously, kicking off this quarter. How should that be viewed within a regulatory strategy for 217 broadly?

They should all be in the same filing, firstly. That's our current plan. And our plan for the MDD, as Steve mentioned earlier, is we would like to see a label claim. It's not -- and we have to hope is that we can not only improve symptoms of depression, but improve insomnia with depression, as a novel claim, which would really further differentiate 217 if we're successful as a completely differentiated first-line therapy. So that is our intention moving forward. The other point that I make is, we haven't disclosed it yet, but I think, we've talked -- said this at the very beginning of journey with 217, what will be required for registration may not be all that we do. So we may look at other studies that can enhance the value of the drug, that may enhance our understanding of how to use it in the context of the greater psychiatric ecosystem. So there may be other studies coming forward, but the core filing right now, as we're intending, will be the 217 PPD, MDD and the polysomnography plus the usual raft of studies that are required for any MDA.

Our next question comes from Jay Olson of Oppenheimer.

Congrats on the outcome at the AdCom last week. I just had a follow up on the placebo effect. Can you help us understand what is the typical duration of PPD in the natural course of disease and, specifically in the 202C study for brexanolone? Is it possible that these moderate patients spontaneously resolved in 30 days causing the placebo group to catch up with the active treatment group? And then what steps have you taken to manage the placebo response in the 217 PPD study considering the endpoints at 14 days instead of 60 hours?

So this is Jeff, and I'll turn this over to Steve. Couple of points. One is, most -- so there are a couple of things here, let's -- just stepping back and thinking about the treatment of psychiatric patients who are at risk. And if you think about this, getting better in 30 days -- or 60 days without treatment, those are days that you are unmedicated at risk potentially for suicide or what else. So one dependence of medicine is that it's better to get faster -- it's better to get better faster. And there's no other part of medicine where you would say, "Well, why don't you just wait and see if the pneumonia goes away before we start penicillin." So if you listen to the AdCom, and listen -- and actually speak to patients, and I'm not saying you haven't had it, who are suffering from PPD, getting better faster gets extremely valuable, and that a lot of companies talk about transformational. This is transformational. This is what innovation really looks like. And we believe that this is important, and it's an important benefit. So when you take a look at 2 of the studies, obviously, the 30-day data look great. On the 202C, you had continued maintenance of effect among the patients on drug, but then you had some placebo drift, which you often see and the agency pointed out as well towards 30 days, but without any loss of effect on the patients who were treated. So the commentary that it's okay to wait just and see what happens is an unacceptable tenant for us in patients who are suffering, at risk for suicide, family disruption and a potential developmental disruption. So I think, as I said earlier, you have to step back and realize we're treating depression now as a disease, not as a lifestyle. And when you take that approach, it should be treated like every disease where you get patients better as rapidly as possible. So I'm going to stop, and I'm going to turn this over to Steve.

And Jay, where we power the study is at the end of treatment where we know that's where we're able to demonstrate efficacy of the drug. And very specifically, we're looking to see in our follow-on periods whether patients lose that affect. So to some extent we're concerned about placebo, I can assure you the way to understand the natural course of history of the disease is not to look at the patients in the placebo group in the placebo-controlled study, but really we want to make sure that the patients stay well. To answer your first question, for patients with PPD, they can have symptoms that go on for weeks, months or even years. And we don't know which patients will or won't go on to experience longer periods of depression, and that gets back to the first point, which drives all of our work. Faster is better, getting patients well and getting them back on their feet so they can take care of themselves and their family is a critical piece of all of this. And that's true for brexanolone, equally true for 217 in PPD and in MDD.

That's very helpful. And for the record, I definitely didn't mean to imply that it's okay to wait to treat. And then I had a follow-up question. Can you just talk about the paradigm shift for psychiatrists going from what has historically been a chronic pharmacological treatment for MDD to an episodic approach with 217? And then the logistics behind the diagnosing and treating patients who relapse? And whether or not you think you'll need the retreatment study to file 217 for MDD?

Yes. This is Jeff, again. I didn't think -- I didn't seem to -- I didn't think you thought that, but it's really interesting that there's an acceptance of lethargic in chronic therapy as you just said, in psychiatry when you might be able to get patients better faster. And I'm a psychiatrist and I treat the patients as does Steve. Getting people better faster is immensely valuable. And when you talk about transformational therapies, and I said this earlier, companies always band me around the world and in a word innovative and transformational. Well, I think I believe what we and the Sage team are trying to do is, in fact, transformational. We're looking at a new mechanism of action that, if approved, will be the first rapidly acting antidepressant on the market in the U.S. It's a novel mechanism, and it's a new way of thinking about treatment. And if 217 works, the same will be the case. The idea of getting patients better in days, not weeks to months, the idea that you don't need chronic pharmacotherapy and be a chronic patient, and the idea that you can treat depression, like a regular medical disorder, is revolutionary. The idea that psychiatrists are doctors and if someone doesn't feel well, you call the doctor up, again, like we do with every other chronic therapy. So we think that this is truly transformational. I think what you pointed out is frankly part of a challenge that we face at Sage and what, frankly, we're happy to take on. It's the idea how do we change the way people think about mental health? How do we change the way that people think about women's health? It's not trivial. And you hear this bundled up in every question in every approach to these drugs, which is, why don't you wait 8 weeks, let's see if an SSRI might work? Go home on an SSRI and call me in 2 weeks and see what happens. You would never accept this for any other form of medical treatment. And our goal at Sage is really to have that kind of transformational effect on the attitude that we all have about metal health. And so I think it's a very important thing for us at Sage. It's very important to all of us individually. Those of us who've been in psychopharmacology for more than 20 or 30 years -- I'm a little older than Steve, he's a youngster, but he's been around for a while as well. And it's very important -- it is a challenge and it's a way that we have to remold the way people think about these diseases. It impacts everything we do, how we price, how we approach payers, what's acceptable. And so it's really part of the entire mission of the company as we think about approaching mental health. I'll turn this over to Steve if he has anything else to add.

No. That -- I'm going to say higher chances as well. And this is -- when we think about things that are transformational for patients that are really important, this really is -- it sounds like anything that's available. And it's very important for us. We know it's important for patients. And I think Jeff said it well, we're willing to take on the difficult work of both demonstrating in our drugs and also helping people understand that there's a different way to help treat patients. So it's a -- it is a big part of what motivates us and the programs that we design.

Our next question comes from Sumant Kulkarni of Canaccord Genuity.

I'll ask both upfront. On SAGE-217 what actually constitutes long term and when could we see data on that study? And second, you're doing a lot of cool science, trying to treat depression as a disease compared to chronic. But I'm going to boil it down to a little bit of a boiling financial question here. How have your thoughts evolved on the number of episodes of retreatment that you might need per year?

So, we are, as Kimi said during the conference call, kicking off what we're calling our long term or retreatment study. And that goes back to the fundamental concept of treating patients when they need it and not when they don't. And that study, we haven't spoke to the time lines of when that will be done. That's part of the overall registration program for 217. And that actually speaks to your second question as well because the fundamental information about how many episodes a person might have? That's not information you could easily obtain from literature and that's part of reason I'm sure why you're asking. The problem is in the current sort of paradigm of treating patients, almost no patients with MDD, or major depression, are treated episodically or not treated at all. So we don't have the fundamental data. We'll be able to create that important critical data on how often, if any, does a patient need for retreatment, what percentage of patients need retreatment and how that fits into the overall paradigm. That will be useful for both our understanding of the business, but it'll also help for something, we were talking about before, sort of transforming the way that people think about treatment.

Yes, the other point, I'd just add. You asked the question, that study will be part of the NDA file. We think, as Steve said, it's an important part of the overall profile of 217, should it be successful, how it should be best used for patients in a clinical practice.

Thank you. And this does conclude our question-and-answer session. I would now like to turn the call back over to Jeff Jonas for any closing remarks.

Well, first, I want to thank everyone for joining us today. And in particular, I want to commend and congratulate the Sage team and all the great work on ZULRESSO and on the great outcome we had at the Advisory Committee. I've done this for 30 years, and it's so exciting to be part of something that really may make a difference in the lives of patients. And as I said earlier, anyone who is looking at the patients in that AdCom or talks to patients understands why we are so invigorated and so insistent on changing the way psychiatry and women's mental health is currently practiced in this country. We want to thank our investigators and everyone else. And again, I just also want to thank all of you for your support and interest in the company. And as a final word, I want to say no matter what's your party affiliation, everyone should go out and vote today. So I want to thank all of you for your attention today, and have a great day.

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