SAGE Therapeutics Inc (SAGE) 2022 Q3 法說會逐字稿

Good morning. Welcome to the Sage Therapeutics Third Quarter 2022 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 expressed written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded.

I would now like to introduce Helen Rubinstein, Director of Investor Relations at Sage. Please go ahead.

Good morning, and thank you for joining Sage Therapeutics' Third Quarter 2022 Financial Results Conference Call. Before we begin, I encourage everyone to go to the Investors & Media section of our website at sagerx.com, where you can find the press release related to today's call as well as the slides that contain supplemental details. I'd like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. Please consult the risk factors discussed in today's press release and in our SEC filings for additional details.

We will begin the call with prepared remarks by Barry Greene, our Chief Executive Officer, who will provide an overview of our progress during the third quarter. We will also be joined by Chris Benecchi, our Chief Business Officer, who will provide an update on our progress in preparation for the potential launch of zuranolone in MDD and PPD. Jim Doherty, our Chief Development Officer, will review recent progress in development activities across our programs; and Kimi Iguchi, our Chief Financial Officer will review the financial results from the quarter. With that, I'll now turn the call over to Barry.

Thanks, Helen, and thank you, everyone, for joining us this morning. 2022 has been a year of focused execution at Sage, and we're extremely pleased with all the progress we've made across our 3 brain health franchises. Our vision is clear, we want to fearlessly lead the way to create a world with better brain health. I believe we're well on our way to accelerating our leadership in brain health and reaching our goal to become a top-tier biopharmaceutical company.

As we reflect on our accomplishments, including reported positive data from multiple clinical studies and initiating trials across our pipeline, we remain confident in our ability to execute for the remainder of this year, and we believe that we have the team to successfully advance our programs across brain health disorders for years to come. All of us at Sage are driven by a tremendous sense of urgency to create novel medicines for people who currently lack adequate treatment options, and we're focused on addressing what matters most to patients. To that end, we've made great progress in building our organization this year to support the exciting milestones we have ahead.

With that, I'll review our recent progress, starting with our depression franchise, led by zuranolone. The national dialogue is finally shifting to focus on a better approach to support the millions of people who are living with depression. We know that depression is complex and that failing to address it can negatively impact people's ability to maintain relationships, be productive at work and engage in activities they enjoy. As we said for years and a recently published just last month in the Journal of Clinical Psychiatry, further supports depression is associated with an increased incidence of dementia, Alzheimer's, cardiovascular disease, metabolic syndrome, diabetes, obesity and certain autoimmune diseases. It doesn't have to be this way. We have a clear opportunity to help people living with depression and are encouraged by our progress.

To that end, we continue to move forward on the rolling NDA submission of zuranolone for major depressive disorder, or MDD, and postpartum depression, or PPD, which is on track to be completed in December of this year. If the FDA grants priority review of our NDA, our PDUFA date would likely be in the third quarter of 2023. If we achieve those milestones and zuranolone is approved for the treatment of MDD and PPD without extension of the FDA review period, we expect the potential launch near the end of 2023, following an anticipated 3-month DEA schedule review. We will be ready.

Based on the totality of data generated across the zuranolone development program, we believe that zuranolone has the potential to be a differentiated treatment option for people suffering from MDD and PPD. As we prepare for a potential launch, we and our collaboration partner, Biogen are thinking big, while taking a state data-driven approach and are prepared to scale fast with success. We know that to launch successfully, we'll need to continue to deepen our engagement with key stakeholders, including health care providers, patients, patient efficacy groups, policymakers and payers.

Over the past year, we presented key analysis on zuranolone at several important medical congresses. The analysis highlights the data on rapid and durable effect and a generally well-tolerated safety profile seen in our clinical studies in MDD and PPD, but used either as monotherapy or adjunctive therapy. Chris will share more detail on the positive reactions we've received from Sage's community as well as feedback from our key stakeholders that continue to be vital as we advance our commercialization plans for zuranolone.

Now I'll turn to our neuropsych franchise led by SAGE-718, a wholly owned, first-in-class NMDA PAM. We're excited to continue progressing a robust clinical program with multiple ongoing and planned Phase II studies in Huntington's disease, Parkinson's disease and Alzheimer's disease. Today, we are excited to share the design of our planned Phase II study in Alzheimer's disease, which Jim will walk through later in the call.

Impaired cognition is a significant morbidity in the indication we're studying with SAGE-718 and can negatively impact people's ability to live life independently. We're committed to advancing the SAGE-17 program with a goal of further demonstrating therapy potential and novel approach.

I'd also like to highlight key corporate updates included in this morning's press release. First, I'm delighted to welcome Dr. Laura Gault to Sage as Chief Medical Officer. In her new role, Laura will be a strategic member of the Sage leadership team focused on advancing Sage's current and emerging product pipeline through all stages of development. Laura brings more than 15 years of experience as a strategic global cross-functional leader with an established track record of neuroscience drug development and designing innovative clinical trials from first-in-human through post-marketing trials. Laura complements a very experienced leadership team and is well prepared to lead Sage for years to come.

Additionally, Jeff Jonas will be transitioning from his role as our Chief Innovation Officer, as he embarks on a new journey at a global private equity firm. While Jeff will no longer hold a full-time role at Sage, we're pleased to have him continue as a member of our Board of Directors and other committees. Jeff has made significant contribution to Sage over the past decade, joining the company first as CEO and then playing a critical role in our drug development strategies as Chief Innovation Officer. We extend our sincere thanks for his leadership in growing the company and helping advance our mission of creating a world with better brain out. We wish him great success in his future endeavors.

I'd now like to invite Jeff to say a few words. Jeff?

Thanks, Barry. I have appreciated Sage's commitment to developing new therapeutics for neurological and psychiatric disorders. I'm convinced Sage has a unique pipeline that has the potential to contribute to innovate treatment for brain health. Barry, having worked with you over the last few years and watching how you've successfully grown the company, I'm more confident than ever in Sage's potential to advance as a top-tier biopharmaceutical company. It's a privilege to stay involved in Sage's growth as a member of the Board. With that, I'll turn it back to Barry.

Thanks, Jeff. I'm confident that our accomplishments so far this year will translate into continued success as we execute our strategic goals. We remain laser-focused on execution through the end of this year as we embark what we believe will be productive journey ahead. Our goal is clear: to deliver the promise of our science and fearlessly lead the way to change the trajectory of care for millions of people living with brain health disorders.

Now I'll turn the call over to Chris to provide additional context on our planned approach as we prepare for the potential commercialization of zuranolone. Chris?

Thanks, Barry. I'm pleased to update you this morning on the significant progress we've made in preparing for the potential launch of zuranolone. As Barry mentioned, we expect to complete our rolling NDA submission for MDD and PPD in December. With this important milestone on the horizon Sage and our collaborator, Biogen, are focused on preparing for the potential launch of zuranolone with the goal of transforming the way depression is treated.

There's a clear need for a differentiated approach to treating depression. The treatments currently available often failed to adequately address the unmet needs of people with MDD and PPD in a timely fashion, resulting in a countless number of people lost to the trial-and-error approach to treatment before their symptoms resolved. From the perspective of people living with depression, weeks matter, days matter and the moments missed matter. Patients strongly desire rapid and lasting resolution of their symptoms without destigmatizing side effects that can be associated with many current antidepressants.

We believe zuranolone, if approved, has the potential to enable health care providers to treat episodes of depression in people with MDD and PPD with the goal of improving symptoms and helping people rapidly return to a state of well-being. As we look ahead, we believe our ability to launch zuranolone successfully is predicated upon 4 key points: first, executing on areas where we believe zuranolone will be most impactful at launch with complete focus. Our market research and KOL engagements in the course of scientific exchange have pointed to clear potential initial use cases for zuranolone.

We believe there is an important opportunity to use this novel therapy as an add-on or switch for patients with MDD and PPD when another therapy isn't meeting expectations. Zuranolone may provide a versatile treatment option that could potentially be used early in a patient's journey. Additionally, based on our clinical trial data, we believe zuranolone has potential in areas in MDD where management has historically been complex, such as in MDD patients with elevated anxiety and/or comorbid insomnia.

In our research, HCP's point to the rapid onset of action and tolerability profile observed in our clinical trials with zuranolone has key attributes that they believe may enable them to quickly and confidently determine whether zuranolone is working for their patients. If zuranolone is approved, we intend to narrow in on these use cases early in the launch as we pursue a focused strategy.

Second, maintaining high engagement with physicians by disseminating our clinical data through scientific exchange. Throughout the past year, we've presented key analyses at several important medical conferences, highlighting the rapid onset and durable effect of zuranolone in MDD and PPD seen in our clinical trials. The feedback to these presentations has been positive. As we've engaged in discussions about the unmet need in MDD, physicians have highlighted that the potential to achieve both a rapid and durable effect matters deeply to them and remains critical to their patients.

They also are increasingly recognizing the episodic nature of depression and that MDD could potentially be treated episodically with treatment-free periods. I'm inspired and motivated by discussions we've had with the medical community on the unmet need in MDD and the feedback we've received from them on the zuranolone clinical data that's been presented. It reinforces our belief in the potential of zuranolone in the treatment of MDD and PPD.

Third, advancing payer discussions around innovative tools designed to help enable broad access to zuranolone in MDD and PPD such as proactive value-based agreements. In our early engagements, payers have been receptive to the potential utilization of zuranolone, given the attributes seen in our clinical trials. They note that based on the data generated to date, zuranolone may offer a treatment option that aligns with their objectives of better managing MDD and PPD.

Further, payers have expressed interest in collaborating with Sage and Biogen on addressing access and reimbursement hurdles through innovative contracting. Value-based agreements are an example of an innovative contracting approach we're exploring. Our plan is to work with payers with the goal of enabling people with MDD and PPD who desperately need new treatment options to be able to access zuranolone quickly and affordably. To truly be transformative, zuranolone must be accessible.

And finally, executing our launch plan with a goal of reaching stakeholders across multiple channels. We plan to employ an omnichannel approach that integrates personal and digital channels to maximize stakeholder reach. To reach these stakeholders, we believe we will need to think big, take a staged data-driven approach and scale quickly with success.

Looking forward to 2023, we are strategically building toward a potential launch. We've made key hires in supply chain, technical operations, medical affairs, marketing and sales leadership roles over the last quarter as we work to ensure that we are ready if zuranolone is approved. These individuals increase the depth and breadth of functional expertise with successful track records of commercializing novel therapies and significant partnership experience. As we continue to advance our launch preparations, we look forward to sharing more detail on our plans to commercialize zuranolone if our regulatory efforts are successful.

With that, I'll turn the call over to Jim for a more detailed discussion of our portfolio progress and current clinical expectations. Jim?

Thanks, Chris, and good morning, everyone. 2022 has marked an important year of development across our 3 franchises, and the team has made tremendous progress across the board from advancing on our rolling NDA submission for zuranolone to delivering multiple positive data readouts and successfully presenting new analyses at key scientific congresses, we're proud of where we are today and look forward to continuing to execute on the pipeline moving forward. What I find even more rewarding is the feedback we've received from the scientific community, as you heard Chris walked through earlier. Having been part of 10 years of growth at Sage and reflecting on all that we've achieved to date, it is extremely rewarding to see the scientific community take note of our progress and continued execution.

Now let me provide an update on our 3 brain health franchises starting with our depression franchise. We recently shared new analyses and additional data from the zuranolone clinical development program at the 2022 Psych Congress and the 35th European College of Neuropsychopharmacology, or ECNP Congress. These presentations included data from the SHORELINE Study and health economic and outcomes research as well as the presentation of data from the SKYLARK Study. The analyses and data presented continue to build on the positive data we've shared earlier in the year.

I want to highlight a few of the key themes that support the potential for zuranolone. First, the analyses highlight the rapidity of onset of zuranolone seen in patients with both MDD and PPD in our clinical trials. In particular, results from the WATERFALL Study showed a treatment effect compared to placebo as early as day 3 in zuranolone 50 milligrams. Additionally, a post hoc analysis of MDD patients from the study suggest the improvements with zuranolone 50 milligrams compared to placebo were clinically meaningful.

Further, in the SKYLARK Study, patients with PPD treated with zuranolone 50 milligrams experienced rapid, clinically meaningful and statistically significant improvements in depressive symptoms as early as day 3 that were sustained through day 45. In both studies, the results were clinically meaningful across the early time periods, further reinforcing our belief in the rapid-acting nature of zuranolone in patients with both MDD and PPD. Second, the analyses speak to the effectiveness and durability seen in our clinical trials in patients who are on zuranolone. Specifically, the SHORELINE Study demonstrated that among patients with MDD who responded to the initial 2-week treatment with zuranolone, 80% received 1 or 2 14-day treatment courses during their time in the study where patients had the opportunity to be followed up for a year.

Median time to first retreatment for those who responded to the initial 2-week treatment was 249 days in the 50-milligram cohort. As it relates to the potential durability of zuranolone for patients with PPD, data from the SKYLARK Study demonstrated positive results across all primary and secondary endpoints, including statistically significant responses across all time periods measured, which further highlights durability.

It's important to note that the durability of effect in our clinical trials was seen broadly across MDD patients, both with and without anxiety symptoms at baseline. As we know from the literature in studies like STAR*D, MDD patients with elevated anxiety as one of the symptoms of their depression, are among those with the poorest outcomes. Based on the data seen in our studies to date, we believe zuranolone may be well suited to address a clear unmet need for a broad range of people with MDD.

Third, the data from our clinical trial suggests potential flexibility of zuranolone as a monotherapy or as add-on therapy in the treatment of MDD. Additional analysis from the LANDSCAPE program showed that whether used as a monotherapy or as an add-on therapy with existing ADTs, zuranolone performed similarly well. These data provide further insight on the flexibility clinicians may have to meet the needs of their patients with MDD with zuranolone, if approved.

Lastly, zuranolone was generally well tolerated with safety profile seen in the SKYLARK and SHORELINE studies consistent with prior clinical studies. Most common adverse events seen in the LANDSCAPE and NEST programs were headache, somnolence, dizziness and sedation with no signals of weight gain or sexual dysfunction that often lead to discontinuation of current treatment options. Overall, these analyses and the data observed consistently across the zuranolone clinical development program reinforced the potential opportunity for zuranolone as a novel treatment for both MDD and PPD.

Now I'd like to turn to our neuropsychiatry franchise, led by SAGE-718, our lead NMDA receptor PAM. SAGE-718 is being developed for certain disorders where impairment of cognition is one of the main drivers of disability. This is a wholly owned program that was granted Fast Track designation by the FDA as a potential treatment for cognitive impairment in Huntington's disease, or HD. We are also investigating SAGE-718 in people with mild cognitive impairment due to Parkinson's disease or PD and people with mild cognitive impairment and mild dementia due to Alzheimer's disease or AD.

To date, we have seen encouraging data across multiple open-label studies which have demonstrated consistent improvements in measures of cognitive and executive function. We are progressing enrollment in the Phase II DIMENSION study and the Phase II SURVEYOR study in people with HD cognitive impairment. We recently reported additional results from the PARADIGM Part B study at ECNP showing that improvement in executive function could be sustained through 28 days of dosing and to day 42 follow-up, supporting the possibility of durable response with extended treatment.

SAGE-718 was generally well tolerated with extended 28-day exposure, and the observed adverse events were consistent with the safety profile of SAGE-718 reported to date. We are also progressing enrollment in the PRECEDENT Study, a Phase II placebo-controlled study of SAGE-718 in people with mild cognitive impairment due to PD. Additionally, we are on track to initiate a placebo-controlled Phase II study with SAGE-718 in patients with AD cognitive impairment, which we are calling the LIGHTWAVE Study, that is planned to begin in late 2022.

Today, we're excited to provide more detail around the study design for this trial, which can also be found on Slide 34 of the corporate deck on our website. This Phase II randomized, double-blind, placebo-controlled study is intended to evaluate the safety, tolerability and effects on cognitive performance of SAGE-718 in patients with mild cognitive impairment or mild dementia due to AD. The study design includes a 12-week treatment period followed by a 4-week follow-up period. The primary endpoint is the change from baseline at day 84 in the coding test from the Wechsler Adult Intelligence Scale for condition.

This is one of the most widely used measures of cognitive performance for adults and older adolescents. In this trial, we're looking for changes in cognitive performance that will be apparent to both patients and their families that can provide meaningful effects to (inaudible) 00:22:56. In addition, we plan to measure a variety of additional end points to assess the effects of SAGE-718 on cognitive performance and functioning, including CGIC, MoCA, CANTAB and The Amsterdam Instrumental Activities of Daily Living Questionnaire.

Looking ahead, we plan to share program updates at key upcoming scientific congresses and further the exchange of ideas, which we believe has never been more important in the quest to help brain health patients get better sooner.

Now I'll move to our neurology franchise, led by SAGE-324, a next-generation positive allosteric modulator of GABA A receptors. We believe that SAGE-324 holds significant potential in the treatment of neurological conditions like essential tremor or ET a disease that has limited treatment options and no new innovation for over 50 years. We announced in the last quarter's earnings call that our Phase II long-term open label study with SAGE-324 and ET was initiated.

With regard to our Phase IIb Kinetic 2 dose-ranging study evaluating SAGE-324 (inaudible) 00:24:00 in ET, we are updating our guidance on completion of enrollment. We now expect to fully enroll the study in late 2023. The change in guidance is a result of a number of factors that have had a particular impact on our ET study. We look forward to sharing more updates on these studies in the coming quarters.

To close, I continue to be amazed by the team that has moved the dynamic pipeline forward. We have an exciting path ahead of us, and we remain laser-focused on execution across our 3 franchises. I look forward to advancing and accelerating our efforts to develop brain health medicines to help patients get better sooner.

Now I'll turn the call over to Kimi for a review of our financials. Kimi?

Thanks, Jim. Before I dive in, I'd like to acknowledge the team's effort and resilience in driving the business forward, especially in the face of a challenging market environment. The work our team has accomplished this year is a direct reflection of dedication we have for patients and the urgency to find new therapies for those in need.

Now turning to our financial results. Details on the third quarter are disclosed in our press release issued this morning. I'll take a moment to provide some context and highlight a few key takeaways. At the end of the third quarter, we maintained a strong cash position, which we believe will allow us to support the largest zuranolone, if approved, continue to build a strong team and provides flexibility to strategically invest across our pipeline. While we expect our cash balance to enable us to execute from a position of strength, we're closely monitoring the external environment and maintaining a disciplined approach to investing.

Our net loss for the third quarter of 2022 was $137.3 million, and we ended the quarter with cash, cash equivalents and marketable securities of $1.4 billion. Turning to operating expenses. R&D expenses were $81.6 million in the third quarter of 2022, primarily driven by the ongoing investments in our wholly owned and partnered programs, including SAGE-324 and SAGE-718.

Looking forward, we expect R&D spend to increase in the coming quarters as we advance the 6 planned and ongoing Phase II studies with SAGE-718 and SAGE-324 mentioned earlier. SG&A expenses increased to $61.5 million in the third quarter of 2022, primarily due to hiring employees to support ongoing activities in anticipation of potential launch. As you heard from Barry and Chris, we're continuing preparations to support the potential launch of zuranolone. To this end, we expect that SG&A spend will increase as we continue commercialization preparations.

As a reminder, as part of our collaboration with Biogen, we're jointly developing zuranolone and SAGE-324 with a 50-50 cost sharing in the United States. We're thinking big about the zuranolone opportunity, though we remain mindful of the capital allocation prior to launch. We plan to invest appropriately and scale with success. During the third quarter, we recorded $18.3 million in reimbursement from Biogen related to our collaboration and license agreement.

Looking ahead to the remainder of 2022, we're reaffirming the financial guidance that we provided earlier this year. We anticipate having cash, cash equivalents and marketable securities of approximately $1.3 billion at the end of 2022. We do not anticipate receipt of any lapse in payments from collaborations in 2022. We believe that our current cash, cash equivalents and anticipated funding from ongoing collaborations and potential revenue will support operations into 2025.

While the market environment remains uncertain, we are fortunate to be in a strong financial position and the flexibility to invest strategically. As always, we're monitoring developments across the macro and regulatory environment, especially as it relates to brain health and are preparing appropriately as new information comes to life. As we embark on a transformational period for the company, I'm confident that our solid balance sheet will enable us to execute from a position of strength. We remain focused on prioritizing disciplined investments across our pipeline to ensure that our plans are scalable, flexible and most importantly, patient centric as we pursue our vision of fearlessly leading the way to create a world with better grade health.

I'll now turn it over to Helen to handle Q&A with the operator. Helen?

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

Certainly. (Operator Instructions) And our first question will come from Yasmeen Rahimi of Piper Sandler.

Congrats on all the updates. A quick question for you as you're getting ready to complete the NDA and preparing for the AdCom. Can you just maybe provide us some color around what are some of the topics that could arise as you're doing the mock AdCom reviews? Anything that could just sort of prepare us into that. And I know we have a little bit to go before that comes out, but greatly appreciate any color that you could share with us this morning. And I'll jump in the queue for follow-up questions.

Yes. Thank you for the question, and I appreciate the congrats on the strong quarter we've had. We're well on our way to file the NDA. And as we've narrowed the guidance, we're prepared to file the NDA in December for the second half of the year as guided. Just to be clear, whether or not we have an AdCom is up to the discretion of the FDA. If we haven't had a comment, I'll ask Jim to comment on what it might look like, we'll be well prepared to listen to patient testimonies and really showcase the totality of the zuranolone data, so we'll be excited for that.

If the FDA decides not to have an AdCom as a signal of an earlier approval, we're certainly ready for that as well. Jim, do you want to talk about if there is an AdCom, what kind of questions we would anticipate and be prepared for?

Sure. Very happy to. And as Barry said, since we don't know whether we're going to have an AdCom or not for program, the team internally at Sage is preparing as if you will. And so we're thinking about this question. Not surprisingly, when you think about what the agency is trying to achieve with an AdCom, we're really trying to understand efficacy and taking tolerability for an agent as well as I think in cases where there's a novel approach, trying to understand pieces of that novel approach.

So in all those areas, we're well prepared. The landscape in that program was designed to provide an interlocking set of data to describe the totality of data, and that includes the totality of the efficacy data, whether the drug is used as monotherapy or in combination with standard antidepressants with patients who have anxiety or not. And in the tolerability area, what we are seeing is a very consistent picture across all of our clinical trials at a very novel and benign safety profile relative to some other agents that are available.

And then finally, in the novelty piece with the GABA mechanism of action. I think that's something that we spent a lot of time listing for all these, we would look forward to the ability to really tell the whole story surrounding (inaudible) 00:32:05.

And our next question will come from Ritu Baral of Cowen.

Mine is going to be focused on commercial strategy. Forgive me if got key parts but one, I have to ask about Biogen and where they are currently contributing to setting the strategy. And the second part is basically you talked about access but as you think about psychiatrists versus potentially PCPs prescribing add-on or switch, do you see that as sort of add-on and switch in the PCP setting versus the specialist setting, especially given all of the constraints in -- certainly in the U.S. for patients trying to access psychiatrists at all?

So 2 parts, Biogen and then access. So on the Biogen piece, we've been well partnered with Biogen from the beginning of the collaboration. We've got strong relationships all over the organization and working very well together. On the regulatory front, tech upfront supply chain as well as commercialization and are well aligned on our commercialization strategy, which Chris spoke on the call. I'll ask Chris to talk about access, but we've seen on the payer front, lots of receptivity to our leaning in with product and value-based agreements and an appreciation that there's over 20 million people with depression 7 million of whom every year are looking for new treatment. So the unmet need remains very, very high.

Chris, do you want to talk about psychiatry, primary care and where we see patients gaining access to zuranolone.

Sure, Thank you. So this past weekend, I spent time at the Neuroscience Education Institute out in Colorado Springs, Colorado with, in large part psychiatrists. And let me say that the tenor of that conversation was that there was excitement around zuranolone and that there's a belief in and amongst them that they're pleased to find zuranolone. They've been looking for medications that work rapidly. They've been looking for medications that work in sustained effect over time, those that can be delivered through a short course and come without the stigmatizing side effect of other antidepressants.

And they're excited about that because they know that they have patients, many of whom are still early in the treatment journey who would benefit from that treatment intervention, whether that is a patient that needs monotherapy or a patient that needs switch to a different medication because they're not achieving the type of efficacy that they're looking for. We've gotten that same sentiment from primary care physicians who we've spoken to as well.

As you know, oftentimes, many patients go to a primary care physician first, and they're looking for that kind of treatment intervention, something that works rapidly lasts over time, something that doesn't come to see tight effects that they don't need to be on in perpetuity. So in some total, both primary care physicians and psychiatrists in looking for those interventions, and we believe we'll be successful first and foremost as we already choose to focus but then over the course of time as we expand into primary care, and we ultimately reach primary care physicians in omnichannel efforts, they'll use it in that same popular control.

And our next question will come from Salveen Richter of Goldman Sachs. One moment.

You've spoken about potentially using a value-based approach with the payers here for the MDD and PPD franchise. Just curious about receptivity to that in your initial discussions.

Yes, I'll start, and then I'll kick it over to Chris. So as you're well aware, proactive value-based agreements have been used by many kind of in the orphan space. We believe we can apply the same principles to a large market like MDD and PPD. As mentioned earlier, there's millions of people living with depression and rapid access without significant prior authorization steps that are important. And we think that by value-based agreements we are sharing risk with payers, that it will lead to more rapid access. I'll start and Chris will dive in.

I can tell you that the receptivity to appreciating depression is a significant unmet need is certainly there. And payers are very open to understanding how we might share to them a BBA (inaudible) 00:37:30 approach. Chris, do you want to add?

Thanks, Barry. So we've spoken to the vast majority of payers already at this stage. And Barry, I think you hit it. Payers are highly engaged, and they're receptive to conversation, particularly at this stage, of our launch readiness efforts. The reason why -- or the reasons why they're receptive and highly engaged from my point of view is that first, they recognize that there still is profound unmet need in the treatment of patients living with both MDD and PPD. That's not just as payers, but that's just people too. Like many of us, payers have loved ones that are suffering from being unable to achieve a diagnosis and to ultimately get the kind of treatment that they need to continue to go on living their lives.

I think the second point that I noticed is that they're incredibly excited about the data that we've shared. The data that shows that patients can be treated rapidly that there's a sustained effect over time that these therapies don't come with stigmatizing side effects, and then they can be delivered over a short course. And patients, whether they have elevated anxiety or difficulty with insomnia, they can be treated with this medication as well. So this is taking a very complex patient population for a payer and streamlining or making the treatment of it much simpler than it has been.

And our next question will come from Paul Matteis of Stifel.

Just one question for me. As you're wrapping up the zuranolone NDA filing, I wanted to specifically ask about how you're framing the SHORELINE Study from a regulatory perspective. And I know we've talked about this before, but specifically, are you framing the SHORELINE Study as a maintenance trial and offering maintenance of benefit or are you framing this as a long-term safety study that offers some information on efficacy, but the reality is you may need to do a maintenance trial post marketing?

So again, we're excited to be filing the NDA in December. We're in good shape with all the modules and we advised in our QA mode. I'll ask Jim to comment a bit on SHORELINE.

You may remember that there was a study at the beginning of the NEST LANDSCAPE, where we were treating patients on a regular basis. In meeting with the FDA, we agreed that the SHORELINE Study could serve as an understanding of long-term safety and retreatment needs. And we're finding the SHORELINE Study along with the NDA as part of the safety database.

It's also informative to understand when we treat somebody with a 2-week course of treatment, the durability of effect. You heard on the call that for those that respond to the first treatment of SHORELINE majority required only 1 or 2 2-week courses in the course of the year and the median time to treatment with 249 days really speaking to the durability of effect. Jim, do you want to talk about more about SHORELINE how will use it in the FDA discussion?

Yes, absolutely, Barry. And Paul, as you've heard me talk about a number of times, each of the studies in zuranolone and NEST programs have their own intended purpose, and they all sort of lock together. But really, as Barry has mentioned, SHORELINE has serviced multiple roles in the program. I think, first and foremost, it provides us the safety data from well over 1,000 patients in (inaudible) 00:40:45 but perhaps even more importantly, it really provides real-world type evidence for how zuranolone is likely to be delivered.

And as you heard me say in the prepared remarks, what we find remarkable from the SHORELINE data today that one of the things we find remarkable is that in the 50-milligram cohort, you're seeing a median retreatment time of 249 days, that's over 8 months. So we're very excited about the data set to date when we're presenting this in our regulatory information, we will provide all of that context. And really, that's going to be part of the dialogue with the FDA is looking at some multiple ways that the SHORELINE data amplifies this (inaudible) 00:41:29.

Our next question comes from Laura Chico of Wedbush.

I guess I'll ask one on SAGE-324 and the KINETIC Study. It looks like there is a bit of an issue on enrollment. I'm just wondering if you could offer perhaps any additional color here in terms of maybe the major issues that have been constraining recruitment and kind of steps that are being taken to address that.

Yes. So SAGE-324, which is GABA PAM MET 4 chronic treatment initially being studied right now in essential tremor. The KINETIC 2 study is a dose-ranging study over a 3-month period of time. And yes, we've updated the guidance that will fully enroll the trial by the end of late next year. Jim, do you want to talk about sort of how we thought about it and what's going on there?

Of course. As you know, we take a pretty robust approach to the conduct of our clinical trials. And that really includes constant assessment of ongoing studies like KINETIC 2. And I would say to summarize our analysis to date, we've seen several challenges to enrollment. And those would include first patient access. We've seen a slower pace of patients entering the trial than we had originally expected. In part due to some specific entry criteria that are part of the protocol that we're addressing. I would say competition, there are multiple potential terminal trials that are currently underway from different sponsors, all targeting a similar patient profile. And finally, site delivery that their staffing challenges at sites and CROs coming out of the pandemic and available sites are loaded with active studies. So we do think it's a combination of a number of factors that is leading to the re-guidance for the KINETIC 2 study.

Yes. Thanks, Jim. And just to be clear, Laura, we're still very excited about 324 and essential tremor and potentially other indications and as you're well aware, there hasn't been innovation in essential tremor for over 50 years. So the fact that multiple companies are working and studying essential tremor is actually great for that patient population.

Our next question comes from Jay Olson of Oppenheimer.

We're curious about SAGE-718 and the DIMENSION Study. Can you talk about the pace of enrollment and when we should expect to see data from that study? And then what are the incremental learnings that you hope to capture from the SURVEYOR Study?

Yes, Jim, I'm going to kick it over to Jim in a moment. But thanks for asking with SAGE-718. We're excited to be developing SAGE-718, our wholly owned NMDA PAM in neurodegenerative diseases. As you mentioned, starting in Huntington's, but also focused on Parkinson's and Alzheimer's. The way we thought about the Huntington's studies is very robustly. We've got multiple studies running, and we've suggested that if the data are robust and positive, we won't be shy in working with regulators to try to purses forward, and we're learning in each and every study.

Jim, do you want to talk more about the Huntington study and how we set them up?

Absolutely happy to. Jay, as you know, we've talked about, we've been working in Huntington's space for a number of years now. And one of the things we've been doing along the way is building our communication with the Huntington's community and I think we're seeing that with the DIMENSION and SURVEYOR studies in the sense that it really is impacting getting patients into the study. So we're very pleased to see that.

As far as the (inaudible) 00:45:36 study, as you know, is about a 3-month in duration study, placebo-controlled format, really building on the work that we've already done in the open label format. So what we're trying to do with the mention is to confirm in a placebo-controlled study, the signal that we've seen with SAGE-718 to date.

The SURVEYOR study plays a couple of different roles in the program. It certainly will allow us to look in another study at the role of 718 relative to a placebo group looking at the primary endpoint, again, being HD-CAB and so improvement of cognitive performance. But in the SURVEYOR study, we're also looking at the impact of those changes to cognitive function on real-world function.

In addition, we will have a control group that is not treated just allowing us to compare relative to the decline that's occurring in Huntington's disease over the duration of the study. So we do see that these studies provide complementary information and we continue to enroll.

As we've done in the past, what we'll do is as we get a little bit further along in our enrollment, we'll give projections on what we think that (inaudible) 00:46:51.

Jay, this is Kimi. Just one more point on 718. I think this is a really good example of our expand and accelerate strategy. When we saw good data when we saw a good profile, we made the investments, and we'll continue to do that in a similar way for the rest of the pipeline. So we look forward to updating you more on SAGE-718.

Our next question will come from Ami Fadia of Needham Company.

Congrats on all the progress. I have a follow-up question on SAGE-217 and as you get ready to complete your filing, can you talk about how you're thinking about pricing the product? I know it's a little too early to actually announce pricing specifically. But can you -- some of the sort of activities ongoing with respect to identifying the right price and some of the feedback you might have received from payers around the price range?

And I appreciate the congratulations on the quarter. We're very excited by that as well. Chris, you want to talk about how we're thinking about access for zuranolone?

Yes, for sure. So while pricing is an important part of value and access strategy, I mean, as you know, it's not the only component that we're focused on at this point. We want to make sure that with respect to the access strategy, we're doing everything that we can to enable physicians who want to prescribe the medication at launch to be able to get the medication with minimal friction.

And for patients who want to experience the benefits of zuranolone approved and launched, that they're able to access that medication rapidly and also affordably. So those are really critical. So with respect to how we're thinking about the pricing, we're going to price it in line with the value that we believe that zuranolone brings to the market based upon the differentiated value proposition that I noted earlier that it actually it actually offers very, I think you hit it earlier. We want to make sure that we stay out of the high-cost specialty tier associated with medications.

We know that, that specialty often comes with prior authorizations and step at that can make it difficult for a physician to prescribe the product and the patient to get it. In order to do that, we're going to lean in with value-based agreements that are proactive, and we've already initiated conversations with payers in and around how we're thinking about value and access in particular VBAs. And as I said earlier, there's a high degree of engagement and receptivity to that. With respect to how we think about the value and access strategy and totality, we want to make sure that we are innovative with our value and access strategy as we are with our discovery development with therapeutics (inaudible) 00:49:52 market.

And our next question will come from Sumant Kulkarni of Canaccord Genuity.

I'll start with a good luck to Jeff, as you walk into a different type of forest this time involving private equity. My question is for Chris. In your early market research on zuranolone, you mentioned that some have started appreciating the episodic nature or component of MDD. Do you have any quantitative details you can share about percentage of physicians or payers that may already be on board with this concept?

And if not on board, what's the main source of resistance? Is it simply tradition or are there more factors perhaps related to physician liability, for example, and docs wanting patients to be on a baseline level of care if the zuranolone effect wears off?

And Jeff might appreciate your support of moving into the private equity, he will call with any help he needs. Look, I think what we're dealing with is we're dealing with historic context in terms of how press thought about and treated and the chronicity of treatment. What I can tell you, and Chris will dive in with some more specifics is that the lift here has gotten much less. The fact is that the median time of patients on a new prescription 7 weeks and most patients cycle through 2 or more drugs in the course of the year. So this belief that a patient is diagnosed is on chronic treatment forever is not supported by the data.

And given the totality is around the data and the opportunity to treat someone for 2 weeks is resonating with a number of physicians. I think you've heard quotes from many physicians that being able to take a pill for 2 weeks and then not being reminded for the rest of the year that they have depression actually a major benefit. So the list has gotten much, much less, the totality of data and there's tremendous receptivity to a short rapid acting and short-course treatment.

Chris, do you want to add?

Yes. Thanks, Barry. Well, I can't answer the number directly at this point. What I can say and let me provide some color on Barry's comments. Again, at the NEI conference that I was just at over this past weekend, there's a lot of conversation going on right now about the ability to treat patients episodically and to return the back to base well. That's really important. And that is a shifting priority that I've seen occur over the last 12 months is as we continue to put data out into the market (inaudible) 00:52:29 exchange have a number of those meaningful conversations.

What clinicians now grasp is that there is an urgency to treat patients to diagnose and treat patients because they understand that clinical outcomes were hinged by earlier diagnosis and earlier treatment that we can go into at a later time. If that is a priority as we move forward. I think sometimes what we take for granted, we have this conversation around that we're living in and amongst a brain health pandemic or a mental health crisis.

These clinicians are living squarely in the midst of this. And you don't change your crisis by doing the same thing that you've always done again and again. You look for different ways to treat patients, and now they have novel therapies coming to market that allow them to do that with zuranolone being a very important one if approved.

Our next question will come from Joon Lee of Truist.

Correct me if I'm wrong, but our understanding is that human abuse studies to require that you test three times the proposed dose, which in the case of zuranolone would be 150 milligrams. Have you tested that dose and in your abuse liability study? And if so, what sort of liability score did you get?

Yes, let me -- so let me say that we've done our human abuse potential studies, they are well done, will be part of the filing, and we've done it in alignment with the agency. Jim, you want to share any more color?

Yes, absolutely, Barry. As Barry said, we have done the studies looking at likability. We've measured relative to benzodiazepines and what we've seen is there are multiple doses for zuranolone, the likability is at therapeutic relevant dose is not different than placebo. And at super therapeutic doses, multiples above the therapeutic dose we're seeing a likability that is comparable to what you see with a therapeutic dose of benzodiazepine.

Yes. Let me -- I'll just add that when we look at human clinical trials, such as SHORELINE the largest natural study running in depression is when we procure these data, the majority of patients that responded require only a 2-week course of treatment and 80% required 1 or 2, 2-week course of treatment. At the exit of all those trials, there are likability like questions that (inaudible) 00:55:03 not seeing anything in SHORELINE that suggests that patients are desiring to get back on drug as you see with other antidepressants.

Our next question will come from Vikram Purohit of Morgan Stanley. One moment.

You've got Will on for Vikram. Congrats on the quarter. Just one follow-up on 718. For the data that's expected throughout the rest of this year, can you provide just a little bit more color on what we could expect to see and what you might be presenting?

Well, thanks, and welcome on the call. Let me turn it over to Jim.

Yes, absolutely. So 718 is in a phase right now of what I would call consistent execution. So the team has been working to open and conduct multiple clinical trials. So we talked earlier on the call about the Huntington's study perspective in SURVEYOR. So those studies are in rolling and moving forward.

The team is also working on the Parkinson's study, the precedent study. So that study was opened a little bit later in the year, but it's also in rolling. And then the -- really the focus right now in addition to getting those studies moving is the work on the LIGHTWAVE study that we've described today. So that study in Alzheimer's disease, mild cognitive repairment and early dementia in Alzheimer's. We're open to get that study and we intend to get that study started by the end of the year. So really, the team is mostly focused at the moment on those studies and getting all of those clinical trials in good shape.

In addition to that, through scientific exchange, we're looking at results from the earlier open-label phase study. So you're starting to see deeper analyses from these studies, including, as I talked about on the call earlier, the longer duration dosing from the PARADIGM study, where we extended from 14-day dosing out to 28-day dosing. And really, what we found encouraging about those results is you see a prolonged improvement that we've seen at the 14-day time point maintained out at least on that 28-day time point with no real change in tolerability profile. So that -- hopefully, that gives you a flavor of a large amount of work that's going on in the (inaudible) 00:57:31 program.

And I would now like to hand the call back to Barry for closing remarks.

Thanks again to everyone for joining us this morning to review our third quarter progress. I'd like to take a moment to thank everyone at Sage for their hard work and dedication in advancing our mission of pioneering solutions to deliver life-changing brain health medicines to every person can thrive. I'm truly inspired by our exceptional people and our collaborators and their relentless commitment to patients. As we continue to make critical advancements across our brain health franchises, we're pleased to be executing from a position of strength. We look forward to continuing our quest to develop and launch transformative brain health medicines for patients in need in the quarters ahead.

Thanks again, everyone, and have a great day, and please get out and vote.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation. You may now disconnect.