Core Viewpoint - The acquisition of Sage Therapeutics by Supernus Pharmaceuticals enhances its position in neuropsychiatric conditions, introducing the innovative product ZURZUVAE® and a new CNS discovery platform, which is expected to drive revenue and cash flow growth while diversifying the revenue base [1][2]. Acquisition Details - Supernus completed the acquisition of Sage for $8.50 per share in cash, plus a contingent value right (CVR) that could yield up to an additional $3.50 per share based on specific milestones [3][4]. - A total of 36,313,509 shares, representing approximately 58% of Sage's outstanding shares, were validly tendered in the offer [10]. Strategic Rationale - The acquisition adds a significant fourth growth product to Supernus's portfolio, expected to be accretive in 2026 due to anticipated cost synergies of up to $200 million annually [2][7]. - ZURZUVAE is the first FDA-approved oral medication for postpartum depression, which strengthens Supernus's psychiatry portfolio [7]. Milestone Payments - The CVR includes milestone payments based on ZURZUVAE's commercial success, including: - $0.50 per CVR upon the first commercial sale in Japan by June 30, 2026 [5]. - $1.00 per CVR if U.S. net sales reach $250 million by December 31, 2027 [6]. - $1.00 per CVR if U.S. net sales reach $300 million by December 31, 2028 [8]. - $1.00 per CVR if U.S. net sales reach $375 million by December 31, 2030 [8]. Company Overview - Supernus Pharmaceuticals focuses on developing and commercializing products for CNS diseases, with a diverse portfolio that includes treatments for ADHD, Parkinson's disease, postpartum depression, and more [13][14].

Financial Performance - Sage Therapeutics reported a quarterly loss of $0.79 per share, better than the Zacks Consensus Estimate of a loss of $0.96, and an improvement from a loss of $1.7 per share a year ago, representing an earnings surprise of +17.71% [1] - The company posted revenues of $31.66 million for the quarter ended June 2025, exceeding the Zacks Consensus Estimate by 80.91%, compared to revenues of $8.65 million in the same quarter last year [2] - Over the last four quarters, Sage Therapeutics has surpassed consensus revenue estimates two times [2] Stock Performance - Sage Therapeutics shares have increased approximately 60.2% since the beginning of the year, significantly outperforming the S&P 500's gain of 8.3% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.79 on revenues of $26.88 million, and for the current fiscal year, it is -$3.65 on revenues of $82.09 million [7] Industry Outlook - The Medical - Biomedical and Genetics industry, to which Sage Therapeutics belongs, is currently ranked in the top 37% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

[PART I – FINANCIAL INFORMATION](index=7&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This section covers the company's unaudited financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures [Item 1. Financial Statements (Unaudited)](index=7&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents Sage Therapeutics' unaudited condensed consolidated financial statements, including balance sheets, statements of operations, cash flows, and equity changes, with detailed notes on business, accounting policies, and key financial components [Condensed Consolidated Balance Sheets](index=7&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement provides a snapshot of the company's financial position, detailing assets, liabilities, and stockholders' equity at specific reporting dates Fair Value Hierarchy as of June 30, 2025 and December 31, 2024 (in thousands) | Assets/Liabilities | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :----------------- | :----------------------------- | :------------------------------- | | **Total Assets** | $422,922 | $547,222 | | **Total Liabilities** | $54,185 | $82,133 | | **Total Stockholders' Equity** | $368,737 | $465,089 | - Total assets decreased from **$547.2 million** at December 31, 2024, to **$422.9 million** at June 30, 2025, primarily due to a reduction in cash and cash equivalents and marketable securities[17](index=17&type=chunk) - Total liabilities decreased from **$82.1 million** at December 31, 2024, to **$54.2 million** at June 30, 2025, mainly driven by a decrease in accounts payable and accrued expenses[17](index=17&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This statement outlines the company's financial performance, presenting revenues, operating costs, and net loss over specific reporting periods Results of Operations and Comprehensive Loss (in thousands) | Metric | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | **Total Revenues** | $31,660 | $8,654 | $45,724 | $16,556 | | **Total Operating Costs and Expenses** | $85,629 | $119,954 | $167,148 | $245,529 | | **Loss from Operations** | $(53,969) | $(111,300) | $(121,424) | $(228,973) | | **Net Loss** | $(49,652) | $(102,854) | $(111,866) | $(211,337) | | **Net Loss per Share (Basic and Diluted)** | $(0.79) | $(1.70) | $(1.80) | $(3.50) | - Total revenues significantly increased for both the three-month (**265% YoY**) and six-month (**176% YoY**) periods ended June 30, 2025, primarily driven by collaboration revenue from ZURZUVAE sales and other revenue from API supply to Shionogi[19](index=19&type=chunk) - Net loss decreased by **51.7%** for the three months ended June 30, 2025, and by **47.1%** for the six months ended June 30, 2025, compared to the same periods in 2024, mainly due to higher revenues and reduced operating costs, particularly in research and development[19](index=19&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement details the sources and uses of cash across operating, investing, and financing activities for specific reporting periods Cash Flow Activities (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :----------------- | :-------------------------------------------- | :-------------------------------------------- | | **Net cash used in operating activities** | $(140,418) | $(118,269) | | **Net cash provided by investing activities** | $126,801 | $139,050 | | **Net cash provided by financing activities** | $83 | $9,628 | | **Net increase (decrease) in cash, cash equivalents and restricted cash** | $(13,534) | $30,409 | - Net cash used in operating activities increased to **$140.4 million** for the six months ended June 30, 2025, from **$118.3 million** in the prior year, primarily due to changes in operating assets and liabilities[23](index=23&type=chunk) - Net cash provided by investing activities decreased to **$126.8 million** in 2025 from **$139.1 million** in 2024, reflecting changes in marketable securities purchases and sales[23](index=23&type=chunk) - Net cash provided by financing activities significantly decreased to **$0.1 million** in 2025 from **$9.6 million** in 2024, mainly due to lower proceeds from common stock sales[23](index=23&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement presents the changes in each component of stockholders' equity over specific reporting periods Stockholders' Equity Components (in thousands) | Equity Component | Balance at Dec 31, 2024 (in thousands) | Balance at Jun 30, 2025 (in thousands) | | :--------------- | :------------------------------------- | :------------------------------------- | | Common Stock | $6 | $6 | | Treasury Stock | $(400) | $(400) | | Additional Paid-in Capital | $3,435,564 | $3,451,307 | | Accumulated Deficit | $(2,970,325) | $(3,082,191) | | Accumulated Other Comprehensive Income | $244 | $15 | | **Total Stockholders' Equity** | **$465,089** | **$368,737** | - Total stockholders' equity decreased from **$465.1 million** at December 31, 2024, to **$368.7 million** at June 30, 2025, primarily due to the net loss incurred during the period[25](index=25&type=chunk) - Additional paid-in capital increased by **$15.7 million**, reflecting stock-based compensation expense and proceeds from the employee stock purchase plan[25](index=25&type=chunk) [1. Nature of the Business](index=11&type=section&id=1.%20Nature%20of%20the%20Business) This section describes the company's biopharmaceutical focus on brain health, key product ZURZUVAE, and recent strategic corporate actions - Sage Therapeutics is a biopharmaceutical company focused on brain health medicines, with ZURZUVAE® (zuranolone) approved for postpartum depression (PPD) in adults and commercially available since December 2023[26](index=26&type=chunk)[27](index=27&type=chunk) - The company discontinued commercial availability of ZULRESSO® (brexanolone) for PPD as of December 31, 2024, and withdrew its NDA in April 2025[29](index=29&type=chunk) - Sage entered into a Merger Agreement with Supernus Pharmaceuticals, Inc. on June 13, 2025, for an acquisition at **$8.50 per share** plus a contingent value right (CVR) of up to **$3.50 per share**, contingent on ZURZUVAE sales and Japanese approval milestones[32](index=32&type=chunk)[33](index=33&type=chunk) - The company executed a corporate reorganization in October 2024, reducing its total workforce by approximately **33%** and R&D workforce by **55%**, to focus on ZURZUVAE launch and prioritized pipeline[30](index=30&type=chunk) - Sage has an accumulated deficit of **$3.1 billion** as of June 30, 2025, and expects existing cash, cash equivalents, and marketable securities to fund operations for at least the next 12 months, anticipating additional financing needs[41](index=41&type=chunk)[42](index=42&type=chunk) [2. Summary of Significant Accounting Policies](index=13&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This section details the significant accounting policies and principles applied in the preparation of the condensed consolidated financial statements - The condensed consolidated financial statements are prepared in accordance with GAAP and SEC rules, with certain information condensed or omitted as permitted for interim reports[44](index=44&type=chunk)[45](index=45&type=chunk) - Research and development costs are expensed as incurred, with accruals based on progress and contractual terms[49](index=49&type=chunk)[50](index=50&type=chunk) - Revenue recognition follows ASC Topic 606, identifying performance obligations, determining transaction price, allocating it, and recognizing revenue upon satisfaction of obligations. Product revenue from ZULRESSO was recognized at the point of control transfer, net of variable consideration (chargebacks, government rebates, trade discounts, financial assistance, product returns)[51](index=51&type=chunk)[56](index=56&type=chunk)[59](index=59&type=chunk) - Collaboration arrangements are assessed under Topic 808 for joint operating activities and Topic 606 for vendor-customer relationships, with income statement classification based on the nature of each activity[73](index=73&type=chunk)[74](index=74&type=chunk) - Fair value measurements for cash equivalents and marketable securities are classified within Level 1 and Level 2 of the fair value hierarchy, based on quoted market prices or observable inputs[81](index=81&type=chunk)[82](index=82&type=chunk) - New accounting pronouncements, ASU 2023-09 (Income Taxes) and ASU 2024-03 (Expense Disaggregation), are being assessed for impact, with ASU 2023-09 expected to impact disclosures but not materially affect financial statements[79](index=79&type=chunk)[80](index=80&type=chunk) [3. Fair Value Measurements](index=21&type=section&id=3.%20Fair%20Value%20Measurements) This section provides details on the fair value measurements of financial instruments, categorized by the fair value hierarchy levels - The Company's cash equivalents are classified within Level 1 and Level 2 of the fair value hierarchy, while marketable securities are classified within Level 2[81](index=81&type=chunk) Fair Value Hierarchy as of June 30, 2025 (in thousands) | Category | Total | Level 1 | Level 2 | Level 3 | | :------- | :---- | :------ | :------ | :------ | | Cash equivalents | $66,266 | $61,921 | $4,345 | $— | | Marketable securities | $298,085 | $— | $298,085 | $— | | **Total** | **$364,351** | **$61,921** | **$302,430** | **$—** | Fair Value Hierarchy as of December 31, 2024 (in thousands) | Category | Total | Level 1 | Level 2 | Level 3 | | :------- | :---- | :------ | :------ | :------ | | Cash equivalents | $80,239 | $73,845 | $6,394 | $— | | Marketable securities | $423,397 | $— | $423,397 | $— | | **Total** | **$503,636** | **$73,845** | **$429,791** | **$—** | - No transfers occurred among Level 1, Level 2, and Level 3 categories during the six months ended June 30, 2025 and 2024[83](index=83&type=chunk) [4. Investments](index=23&type=section&id=4.%20Investments) This section details the company's marketable securities portfolio, including fair values, amortized costs, and unrealized gains/losses Marketable Securities as of June 30, 2025 (in thousands) | Security Type | Amortized Cost (in thousands) | Gross Unrealized Gains (in thousands) | Gross Unrealized Losses (in thousands) | Fair Value (in thousands) | | :------------ | :---------------------------- | :------------------------------------ | :------------------------------------- | :------------------------ | | U.S. government securities | $8,697 | $— | $(1) | $8,696 | | U.S. corporate bonds | $197,070 | $68 | $(63) | $197,075 | | International corporate bonds | $53,106 | $32 | $(22) | $53,116 | | U.S. commercial paper | $16,434 | $— | $— | $16,434 | | International commercial paper | $13,629 | $— | $— | $13,629 | | U.S. certificates of deposit | $3,040 | $— | $— | $3,040 | | U.S. municipal securities | $6,094 | $1 | $— | $6,095 | | **Total** | **$298,070** | **$101** | **$(86)** | **$298,085** | - As of June 30, 2025, the Company held **$298.1 million** in marketable securities, with total gross unrealized gains of **$0.1 million** and gross unrealized losses of **$(0.086) million**[85](index=85&type=chunk) - Unrealized losses on investments were primarily due to interest rate increases, but the Company does not intend to sell these investments before recovery of their amortized cost basis[87](index=87&type=chunk) - All marketable securities are classified as current assets, with **$18.9 million** having maturities of one to two years as of June 30, 2025[88](index=88&type=chunk)[90](index=90&type=chunk) [5. Accrued Expenses](index=24&type=section&id=5.%20Accrued%20Expenses) This section provides a detailed breakdown of the company's accrued expenses by category at specific reporting dates Components of Accrued Expenses (in thousands) | Category | June 30, 2025 (in thousands) | December 31, 2024 (in thousands) | | :------- | :--------------------------- | :------------------------------- | | Accrued research and development costs | $7,318 | $19,758 | | Restructuring | $2,174 | $15,307 | | Employee-related | $10,748 | $14,840 | | Professional services | $21,413 | $7,114 | | Other | $419 | $579 | | **Total** | **$42,072** | **$57,598** | - Total accrued expenses decreased by **$15.5 million** from December 31, 2024, to June 30, 2025, primarily due to significant reductions in accrued R&D costs and restructuring accruals[91](index=91&type=chunk) - Professional services accruals increased substantially from **$7.1 million** to **$21.4 million**, indicating higher legal and advisory fees[91](index=91&type=chunk) [6. Commitments and Contingencies](index=24&type=section&id=6.%20Commitments%20and%20Contingencies) This section details the company's legal proceedings, regulatory investigations, and other contingent liabilities - The Company is involved in a federal securities class action lawsuit (Securities Class Action) filed in August 2024, alleging violations of U.S. securities laws, which the Company intends to vigorously defend[93](index=93&type=chunk)[315](index=315&type=chunk) - An SEC subpoena was received in October 2024, requesting documents related to the zuranolone NDA for MDD, including communications with the FDA and material nonpublic information, with the Company cooperating[94](index=94&type=chunk)[316](index=316&type=chunk) - Multiple derivative litigations (Zhu, Matton, Pizzelanti) were filed in March-May 2025, based on allegations from the Securities Class Action, and have been consolidated[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk)[98](index=98&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk) - Two stockholder complaints (Taylor, Morgan) were filed in July 2025 related to the Supernus Merger Agreement, alleging omitted material information in the Schedule 14D-9, which the Company denies and has voluntarily supplemented[99](index=99&type=chunk)[100](index=100&type=chunk)[101](index=101&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) - The Company is currently unable to predict the outcome or estimate possible losses for the ongoing legal proceedings and SEC investigation[102](index=102&type=chunk)[321](index=321&type=chunk) [7. Collaboration Agreements](index=26&type=section&id=7.%20Collaboration%20Agreements) This section outlines the company's strategic collaboration agreements, including terms, milestones, and financial impacts - The Company has a strategic collaboration with Shionogi for zuranolone in Japan, Taiwan, and South Korea, with Shionogi responsible for development and commercialization. Sage is eligible for up to **$55.0 million** in regulatory/commercial milestones and tiered royalties[103](index=103&type=chunk)[104](index=104&type=chunk) - For the three and six months ended June 30, 2025, Sage recognized **$8.1 million** and **$8.1 million**, respectively, in other revenue from Shionogi for the supply of API for zuranolone's expected commercial launch in Japan[108](index=108&type=chunk)[257](index=257&type=chunk)[273](index=273&type=chunk) - The Biogen Collaboration Agreement, effective December 2020, involves joint development and commercialization of SAGE-217 products (including ZURZUVAE) in the U.S., with equal sharing of costs, profits, and losses. Biogen records product sales[110](index=110&type=chunk)[119](index=119&type=chunk)[203](index=203&type=chunk)[222](index=222&type=chunk) - Biogen terminated the collaboration for SAGE-324 products worldwide, effective February 17, 2025, resulting in Sage not receiving any related milestone payments[113](index=113&type=chunk)[116](index=116&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Collaboration revenue - related party from Biogen's ZURZUVAE sales was **$23.2 million** for Q2 2025 (vs. **$7.4 million** in Q2 2024) and **$37.0 million** for H1 2025 (vs. **$13.6 million** in H1 2024), reflecting increased commercialization[133](index=133&type=chunk)[256](index=256&type=chunk)[272](index=272&type=chunk) - The Company recorded net reimbursement from Biogen of **$3.0 million** (Q2 2025) and **$2.7 million** (H1 2025) added to R&D expenses, and **$6.2 million** (Q2 2025) and **$11.0 million** (H1 2025) added to SG&A expenses, as Biogen incurred a greater share of these costs[134](index=134&type=chunk)[238](index=238&type=chunk)[252](index=252&type=chunk) [8. Common Stock](index=32&type=section&id=8.%20Common%20Stock) This section provides information on the company's common stock, including authorized, issued, and outstanding shares, and related transactions - As of June 30, 2025, Sage had **120,000,000** authorized shares of common stock (**$0.0001** par value), with **62,631,252** shares issued and **62,628,219** shares outstanding[17](index=17&type=chunk) - The Company holds **3,033** shares of common stock in treasury, at a cost of **$0.4 million**, related to stock option exercises[142](index=142&type=chunk) - Under the ATM Sales Agreement, the Company may sell up to **$250.0 million** of common stock. No shares were sold in Q2 or H1 2025, but **700,000** shares were sold in H1 2024 for **$8.3 million** gross proceeds[143](index=143&type=chunk)[147](index=147&type=chunk) [9. Stock-Based Compensation](index=33&type=section&id=9.%20Stock-Based%20Compensation) This section details the company's stock-based compensation plans, outstanding awards, and related expenses - The 2024 Equity Incentive Plan replaced the 2014 Plan, reserving **5,500,000** new shares plus up to **11,002,166** shares from outstanding 2014 Plan awards[149](index=149&type=chunk) - As of June 30, 2025, **8,652,872** shares were underlying outstanding awards across all plans, with **6,247,443** shares available for future issuance under the 2024 Plan[153](index=153&type=chunk) - An Option Exchange Program in January 2024 allowed eligible employees to exchange **3,079,608** Eligible Options for **1,483,113** replacement options, resulting in **$1.7 million** of additional stock-based compensation expense over 18 months[156](index=156&type=chunk)[157](index=157&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Research and development | $3,082 | $6,118 | $5,138 | $11,084 | | Selling, general and administrative | $5,651 | $11,049 | $10,522 | $19,781 | | **Total** | **$8,733** | **$17,167** | **$15,660** | **$30,865** | - Total stock-based compensation expense decreased by **49.1%** for Q2 2025 and **49.3%** for H1 2025 compared to the prior year, primarily due to headcount reductions from the 2024 Restructuring[176](index=176&type=chunk) [10. Net Loss Per Share](index=38&type=section&id=10.%20Net%20Loss%20Per%20Share) This section presents the calculation of basic and diluted net loss per share, along with the underlying financial data Net Loss Per Share (Basic and Diluted) | Period | Net Loss (in thousands) | Weighted Average Common Shares Outstanding | Net Loss Per Share | | :----- | :---------------------- | :----------------------------------------- | :----------------- | | Q2 2025 | $(49,652) | 62,610,598 | $(0.79) | | Q2 2024 | $(102,854) | 60,538,319 | $(1.70) | | H1 2025 | $(111,866) | 62,236,163 | $(1.80) | | H1 2024 | $(211,337) | 60,337,258 | $(3.50) | - Net loss per share improved significantly, decreasing from **$(1.70)** to **$(0.79)** for Q2 2025 and from **$(3.50)** to **$(1.80)** for H1 2025, reflecting reduced net losses[179](index=179&type=chunk) - Potential dilutive securities, including stock options and restricted stock units, were excluded from diluted EPS calculation as their inclusion would be anti-dilutive due to net losses[179](index=179&type=chunk) [11. Restructuring](index=38&type=section&id=11.%20Restructuring) This section outlines the financial impacts and workforce reductions associated with the company's restructuring activities - The 2023 Restructuring, which included a **40%** workforce reduction, incurred total charges of **$32.9 million**, all paid by June 30, 2025[180](index=180&type=chunk)[181](index=181&type=chunk) - The 2024 Restructuring, implemented in October 2024, involved a **33%** reduction in total workforce and **55%** in R&D, resulting in **$22.6 million** in total charges through June 30, 2025, primarily for termination benefits[182](index=182&type=chunk)[183](index=183&type=chunk) - Substantially all accrued 2024 Restructuring charges are expected to be paid in cash by September 30, 2025[183](index=183&type=chunk) [12. Segment Information](index=40&type=section&id=12.%20Segment%20Information) This section clarifies the company's single operating segment structure and how its Chief Operating Decision Maker assesses performance - The Company operates as a single reporting segment, focused on discovering, developing, and delivering brain health medicines[184](index=184&type=chunk) - The Chief Operating Decision Maker (CODM) manages resources and assesses performance on a total company basis, using consolidated financial information and net loss as the measure of segment profit or loss[184](index=184&type=chunk) Significant Expense Categories (in thousands) | Category | Three Months Ended June 30, 2025 (in thousands) | Three Months Ended June 30, 2024 (in thousands) | Six Months Ended June 30, 2025 (in thousands) | Six Months Ended June 30, 2024 (in thousands) | | :------- | :---------------------------------------------- | :---------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenues | $31,660 | $8,654 | $45,724 | $16,556 | | Cost of revenues | $(55) | $1,407 | $600 | $2,676 | | zuranolone (ZURZUVAE) Program expenses | $15,835 | $4,695 | $27,845 | $9,952 | | SAGE-319 Program expenses | $2,954 | $2,306 | $4,621 | $3,259 | | SAGE-324 Program expenses | $(1,597) | $2,286 | $(2,435) | $6,118 | | dalzanemdor Program expenses | $(1,944) | $15,331 | $(1,974) | $38,999 | | Other R&D programs | $3,472 | $8,067 | $6,977 | $17,524 | | Non-program expenses | $24,299 | $22,933 | $43,556 | $45,065 | | People and staff augmentation | $34,162 | $45,760 | $72,013 | $91,670 | | Restructuring | $(230) | $— | $283 | $(597) | | Other segment items | $4,416 | $8,723 | $6,104 | $13,227 | | **Net loss** | **$(49,652)** | **$(102,854)** | **$(111,866)** | **$(211,337)** | [13. Subsequent Event](index=41&type=section&id=13.%20Subsequent%20Event) This section discloses a significant event that occurred after the reporting period, specifically new tax legislation - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, amending U.S. tax laws related to bonus depreciation and R&D, with the Company currently evaluating its impact on financial statements[188](index=188&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=42&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes the company's financial condition and results of operations, covering business overview, product portfolio, proposed acquisition, revenue, expenses, and liquidity [Proposed Acquisition by Supernus Pharmaceuticals, Inc.](index=42&type=section&id=Proposed%20Acquisition%20by%20Supernus%20Pharmaceuticals,%20Inc.) This section outlines the terms, conditions, and implications of the proposed acquisition of Sage Therapeutics by Supernus Pharmaceuticals, Inc - On June 13, 2025, Sage entered into a Merger Agreement with Supernus Pharmaceuticals, Inc. for an acquisition via a tender offer at **$8.50 per share** in cash, plus one nontransferable contractual contingent value right (CVR) per share, potentially worth up to **$3.50**[192](index=192&type=chunk) - The CVRs are tied to ZURZUVAE's commercial milestones, including first commercial sale in Japan for MDD by June 30, 2026 (**$0.50**), and U.S. net sales exceeding **$250 million** by Dec 31, 2027 (**$1.00**), **$300 million** by Dec 31, 2028 (**$1.00**), and **$375 million** by Dec 31, 2030 (**$1.00**)[193](index=193&type=chunk) - The tender offer commenced on July 2, 2025, with an initial expiration date of July 30, 2025, and is subject to customary conditions, including a minimum tender of over **50%** of outstanding shares[192](index=192&type=chunk)[196](index=196&type=chunk) - Upon consummation, Sage will merge into a wholly-owned subsidiary of Supernus and cease to be a publicly traded company[194](index=194&type=chunk)[195](index=195&type=chunk) - The Merger Agreement includes a termination fee of **$22.4 million** payable by Sage under specified circumstances, such as entering into a superior acquisition offer[197](index=197&type=chunk) [Overview](index=43&type=section&id=Overview) This section provides a general business context, product portfolio update, and financial outlook for the company - Sage Therapeutics is a biopharmaceutical company focused on brain health, developing novel chemical entities targeting GABA and NMDA receptor systems for neuropsychiatric and neurodevelopmental disorders[200](index=200&type=chunk) - ZURZUVAE® (zuranolone) was approved by the FDA on August 4, 2023, for postpartum depression (PPD) and became commercially available in the U.S. in December 2023, co-commercialized with Biogen[203](index=203&type=chunk) - The Company discontinued commercial availability of ZULRESSO® (brexanolone) in the U.S. as of December 31, 2024, and withdrew its NDA in April 2025[210](index=210&type=chunk) - Biogen terminated the collaboration for SAGE-324 products effective February 17, 2025, following negative Phase 2b KINETIC 2 Study results. Sage is evaluating other potential indications for SAGE-324, including seizures in DEEs[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk) - Sage is investigating SAGE-319 for behavioral symptoms in neurodevelopmental disorders, with Phase 1 multiple ascending dose study data expected by late 2025[209](index=209&type=chunk) - The Company incurred a net loss of **$111.9 million** for the six months ended June 30, 2025, and had an accumulated deficit of **$3.1 billion**, expecting significant expenses and operating losses for the foreseeable future[214](index=214&type=chunk)[215](index=215&type=chunk) - The October 2024 corporate reorganization and pipeline prioritization, including a **33%** total workforce reduction and **55%** R&D workforce reduction, are expected to reduce operating expenses in 2025 relative to 2024[216](index=216&type=chunk) - Existing cash, cash equivalents, and marketable securities are anticipated to fund operations to mid-2027, excluding potential milestone payments, but additional financing will be required[216](index=216&type=chunk)[217](index=217&type=chunk) [Financial Operations Overview](index=48&type=section&id=Financial%20Operations%20Overview) This section provides an overview of the company's revenue streams, cost of revenues, and trends in operating expenses - Revenue streams include collaboration revenue from Biogen's ZURZUVAE sales in the U.S. (launched Dec 2023) and other revenue from API supply to Shionogi for zuranolone in Japan[221](index=221&type=chunk)[222](index=222&type=chunk)[227](index=227&type=chunk) - In Q2 2025, over **4,000** ZURZUVAE prescriptions were shipped, a **36%** increase from the prior quarter, totaling over **13,500** prescriptions since launch[224](index=224&type=chunk) - Payor coverage for ZURZUVAE is in place for a majority of commercial and Medicaid covered lives, with ongoing formulary discussions expected through 2025[223](index=223&type=chunk) - Cost of revenues for ZULRESSO ceased with its discontinuation. ZURZUVAE manufacturing costs are shared with Biogen, and zero-cost inventory is expected for an extended period[235](index=235&type=chunk) - Research and development expenses are expected to decrease in 2025 due to pipeline reprioritization and the 2024 Restructuring, which included a **55%** reduction in R&D workforce[241](index=241&type=chunk) - Selling, general and administrative expenses are expected to increase in 2025 due to ZURZUVAE commercialization efforts, including sales force expansion and digital marketing, partially offset by 2024 Restructuring savings[249](index=249&type=chunk)[251](index=251&type=chunk) - The 2024 Restructuring incurred **$0.3 million** in net additional expense during H1 2025, primarily for one-time termination benefits, with total charges of **$22.6 million** incurred through June 30, 2025[253](index=253&type=chunk) [Results of Operations](index=55&type=section&id=Results%20of%20Operations) This section provides a comparative analysis of the company's financial performance for the reported periods [Comparison of the Three Months Ended June 30, 2025 and 2024](index=55&type=section&id=Comparison%20of%20the%20Three%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares the company's financial results for the three-month periods ended June 30, 2025, and 2024 Results of Operations (Three Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | Increase (Decrease) (in thousands) | | :----- | :------------------ | :------------------ | :--------------------------------- | | Product revenue, net | $— | $600 | $(600) | | Collaboration revenue - related party | $23,209 | $7,420 | $15,789 | | Other revenue | $8,451 | $634 | $7,817 | | **Total revenues** | **$31,660** | **$8,654** | **$23,006** | | Cost of revenues | $(55) | $1,407 | $(1,462) | | Research and development | $23,917 | $62,564 | $(38,647) | | Selling, general and administrative | $61,997 | $55,983 | $6,014 | | Restructuring | $(230) | $— | $(230) | | **Total operating costs and expenses** | **$85,629** | **$119,954** | **$(34,325)** | | Loss from operations | $(53,969) | $(111,300) | $57,331 | | Interest income | $4,323 | $8,431 | $(4,108) | | Other income (expense), net | $(6) | $15 | $(21) | | **Net loss** | **$(49,652)** | **$(102,854)** | **$53,202** | - Total revenues increased by **$23.0 million**, or **265.8%**, primarily due to a **$15.8 million** increase in collaboration revenue from ZURZUVAE sales and a **$7.8 million** increase in other revenue from Shionogi API supply[254](index=254&type=chunk)[256](index=256&type=chunk)[257](index=257&type=chunk) - Net loss decreased by **$53.2 million**, or **51.7%**, driven by higher revenues and a **$34.3 million** decrease in total operating costs and expenses[254](index=254&type=chunk) - Research and development expenses decreased by **$38.6 million**, or **61.8%**, mainly due to reduced spending on SAGE-324 and dalzanemdor programs, lower unallocated expenses, and decreased stock-based compensation following the 2024 Restructuring[264](index=264&type=chunk) - Selling, general and administrative expenses increased by **$6.0 million**, or **10.7%**, primarily due to higher professional fees related to strategic alternatives review and litigation, and increased net reimbursement to Biogen for commercialization efforts, partially offset by lower stock-based compensation[266](index=266&type=chunk)[269](index=269&type=chunk) - Interest income decreased by **$4.1 million** due to a smaller investment balance[267](index=267&type=chunk) [Comparison of the Six Months Ended June 30, 2025 and 2024](index=61&type=section&id=Comparison%20of%20the%20Six%20Months%20Ended%20June%2030,%202025%20and%202024) This section compares the company's financial results for the six-month periods ended June 30, 2025, and 2024 Results of Operations (Six Months Ended June 30, in thousands) | Metric | 2025 (in thousands) | 2024 (in thousands) | Increase (Decrease) (in thousands) | | :----- | :------------------ | :------------------ | :--------------------------------- | | Product revenue, net | $— | $2,289 | $(2,289) | | Collaboration revenue - related party | $37,036 | $13,633 | $23,403 | | Other revenue | $8,688 | $634 | $8,054 | | **Total revenues** | **$45,724** | **$16,556** | **$29,168** | | Cost of revenues | $600 | $2,676 | $(2,076) | | Research and development | $46,676 | $134,297 | $(87,621) | | Selling, general and administrative | $119,589 | $108,556 | $11,033 | | Restructuring | $283 | $— | $283 | | **Total operating costs and expenses** | **$167,148** | **$245,529** | **$(78,381)** | | Loss from operations | $(121,424) | $(228,973) | $107,549 | | Interest income | $9,546 | $17,634 | $(8,088) | | Other income, net | $12 | $2 | $10 | | **Net loss** | **$(111,866)** | **$(211,337)** | **$99,471** | - Total revenues increased by **$29.2 million**, or **176.2%**, primarily due to a **$23.4 million** increase in collaboration revenue from ZURZUVAE sales and an **$8.1 million** increase in other revenue from Shionogi API supply[270](index=270&type=chunk)[272](index=272&type=chunk)[273](index=273&type=chunk) - Net loss decreased by **$99.5 million**, or **47.1%**, driven by higher revenues and a **$78.4 million** decrease in total operating costs and expenses[270](index=270&type=chunk) - Research and development expenses decreased by **$87.6 million**, or **65.2%**, mainly due to reduced spending on SAGE-324 and dalzanemdor programs, lower unallocated expenses, and decreased stock-based compensation following the 2024 Restructuring[280](index=280&type=chunk)[282](index=282&type=chunk) - Selling, general and administrative expenses increased by **$11.0 million**, or **10.2%**, primarily due to higher professional fees related to strategic alternatives review and litigation, and increased net reimbursement to Biogen for commercialization efforts, partially offset by lower stock-based compensation[281](index=281&type=chunk)[283](index=283&type=chunk)[284](index=284&type=chunk) - Interest income decreased by **$8.1 million** due to a smaller investment balance[285](index=285&type=chunk) [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) This section analyzes the company's cash position, cash flow activities, and future capital requirements - As of June 30, 2025, primary liquidity sources were cash, cash equivalents, and marketable securities totaling **$365.6 million**[288](index=288&type=chunk) - Net cash used in operating activities was **$140.4 million** for H1 2025, compared to **$118.3 million** for H1 2024[290](index=290&type=chunk)[291](index=291&type=chunk) - Net cash provided by investing activities was **$126.8 million** for H1 2025, compared to **$139.1 million** for H1 2024[290](index=290&type=chunk)[293](index=293&type=chunk) - Net cash provided by financing activities was **$0.1 million** for H1 2025, significantly down from **$9.6 million** for H1 2024, due to lower common stock sales[290](index=290&type=chunk)[294](index=294&type=chunk) - The Company anticipates existing cash, cash equivalents, and marketable securities will fund operations to mid-2027, but additional financing will be required due to ongoing losses and significant operating expenses[296](index=296&type=chunk)[301](index=301&type=chunk) - Future capital requirements are influenced by the Supernus acquisition, ZURZUVAE commercialization success, R&D costs for product candidates, and macroeconomic conditions[300](index=300&type=chunk) - There have been no material changes to contractual obligations and commitments from the Annual Report[302](index=302&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=69&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's exposure to market risks, primarily interest rate and foreign currency fluctuations, and assesses their potential impact - As of June 30, 2025, the Company held **$365.6 million** in cash, cash equivalents, and marketable securities, primarily exposed to interest rate fluctuations[308](index=308&type=chunk) - Due to the short-term nature of investments, a sudden change in market interest rates is not expected to have a material impact on financial condition or results of operations[308](index=308&type=chunk) - The Company has immaterial exposure to foreign currency exchange rate changes from foreign operations and does not hedge against this risk[309](index=309&type=chunk) - The Company does not believe its cash, cash equivalents, and marketable securities have significant risk of default or illiquidity, but maintains amounts in excess of federally insured limits[310](index=310&type=chunk) - Inflation has not had a material effect on results of operations during the six months ended June 30, 2025 and 2024[311](index=311&type=chunk) [Item 4. Controls and Procedures](index=69&type=section&id=Item%204.%20Controls%20and%20Procedures) This section confirms the effectiveness of the company's disclosure controls and procedures and reports no material changes to internal control over financial reporting - As of June 30, 2025, management concluded that the Company's disclosure controls and procedures were effective at the reasonable assurance level[313](index=313&type=chunk) - No changes to internal control over financial reporting occurred during the period covered by this Quarterly Report that materially affected, or are reasonably likely to materially affect, internal control over financial reporting[314](index=314&type=chunk) [PART II – OTHER INFORMATION](index=70&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This section provides information on legal proceedings, risk factors, and other miscellaneous disclosures relevant to the company [Item 1. Legal Proceedings](index=70&type=section&id=Item%201.%20Legal%20Proceedings) This section details the company's ongoing legal proceedings, including a securities class action, SEC investigation, derivative litigations, and merger-related stockholder complaints - A federal securities class action lawsuit was filed in August 2024, alleging violations of U.S. securities laws between April 2021 and July 2024, with an amended complaint filed in March 2025[315](index=315&type=chunk) - The SEC issued a subpoena in October 2024, requesting documents and information related to the zuranolone NDA for MDD, including communications with the FDA and material nonpublic information[316](index=316&type=chunk) - Multiple derivative litigations (Zhu, Matton, Pizzelanti) were commenced in March-May 2025, alleging breaches of fiduciary duty and other claims, and have been consolidated[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk)[320](index=320&type=chunk) - Two stockholder complaints (Taylor, Morgan) were filed in July 2025 concerning the Supernus Merger Agreement, alleging material information omissions in the Schedule 14D-9, which the Company has voluntarily supplemented[322](index=322&type=chunk)[323](index=323&type=chunk)[324](index=324&type=chunk) - The Company is unable to predict the outcome of these legal proceedings or reasonably estimate a range of possible losses[321](index=321&type=chunk) [Item 1A. Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) This section outlines significant risks to the company's business, including acquisition uncertainties, product development and commercialization challenges, regulatory hurdles, and intellectual property concerns [Risks Related to our Pending Acquisition by Supernus Pharmaceuticals, Inc.](index=72&type=section&id=Risks%20Related%20to%20our%20Pending%20Acquisition%20by%20Supernus%20Pharmaceuticals,%20Inc.) This section details risks associated with the proposed acquisition by Supernus Pharmaceuticals, Inc., including completion uncertainty and potential business disruptions - The proposed acquisition by Supernus Pharmaceuticals, Inc. may not be completed within the anticipated timeframe or at all, which could adversely affect the Company's business and financial results[327](index=327&type=chunk) - Failure to complete the transaction could lead to a decline in stock price, a **$22.4 million** termination fee payable to Supernus, negative publicity, and disruptions to ZURZUVAE commercialization efforts[332](index=332&type=chunk)[333](index=333&type=chunk) - The consummation of the offer is subject to various conditions, including a minimum tender of over **50%** of shares and regulatory approvals, which may not be satisfied or waived[329](index=329&type=chunk)[334](index=334&type=chunk) - The pendency of the transaction could disrupt business operations, divert management attention, and negatively impact employee retention and relationships with collaborators and partners[336](index=336&type=chunk)[337](index=337&type=chunk) - Stockholders will not participate in future financial upside beyond the CVRs, which could expire valueless if specified milestones (e.g., ZURZUVAE sales targets, Japanese approval) are not met by their deadlines[343](index=343&type=chunk)[344](index=344&type=chunk)[346](index=346&type=chunk) - The tax treatment of the CVRs is unclear, potentially leading to adverse U.S. federal income tax consequences for holders[347](index=347&type=chunk) - The Merger Agreement includes non-solicitation restrictions and a termination fee, which could deter alternative transactions or require the use of available cash[348](index=348&type=chunk)[349](index=349&type=chunk) [Risks Related to Product Development, Regulatory Approval and Commercialization](index=77&type=section&id=Risks%20Related%20to%20Product%20Development,%20Regulatory%20Approval%20and%20Commercialization) This section addresses risks inherent in product development, regulatory approval processes, and successful commercialization efforts - Commercialization of ZURZUVAE for PPD in the U.S. may not be successful due to lack of broad market acceptance, healthcare professional adoption, payor coverage/reimbursement restrictions, or competition[351](index=351&type=chunk)[352](index=352&type=chunk)[353](index=353&type=chunk) - The rejection of Biogen's unsolicited acquisition proposal and enforcement of the standstill provision may adversely impact the relationship with Biogen, potentially affecting ZURZUVAE sales and commercialization efforts[355](index=355&type=chunk)[356](index=356&type=chunk) - Drug development is long, expensive, and uncertain; product candidates may fail clinical trials (e.g., SAGE-324, dalzanemdor), encounter safety issues, or face regulatory delays[358](index=358&type=chunk)[359](index=359&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk) - Regulatory approval is complex and lengthy; authorities may delay or deny approval, require additional trials, or impose significant post-marketing obligations (e.g., REMS, boxed warnings, pediatric studies)[377](index=377&type=chunk)[379](index=379&type=chunk)[381](index=381&type=chunk)[382](index=382&type=chunk)[383](index=383&type=chunk) - The number of patients with target diseases (e.g., PPD) may be smaller than expected, or market assumptions incorrect, limiting revenue potential[390](index=390&type=chunk) - Reliance on third-party suppliers for manufacturing commercial and clinical supplies poses risks if they fail to comply with cGMPs, experience disruptions, or are unwilling to enter long-term agreements[407](index=407&type=chunk)[409](index=409&type=chunk)[410](index=410&type=chunk)[414](index=414&type=chunk) - Existing collaborations may not lead to successful development or commercialization, and disagreements with collaborators or their termination (e.g., Biogen's termination for SAGE-324) could adversely affect the business[438](index=438&type=chunk)[440](index=440&type=chunk) - The Company's ability to identify new product candidates or file INDs at the expected rate may be limited, and resource allocation decisions could lead to missed opportunities[442](index=442&type=chunk)[443](index=443&type=chunk) - Reliance on third parties (CROs) for clinical trials carries risks of non-compliance, delays, or data integrity issues, potentially harming development and increasing costs[444](index=444&type=chunk)[446](index=446&type=chunk) [Risks Related to Our Intellectual Property Rights](index=117&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property%20Rights) This section addresses risks concerning the company's ability to protect its intellectual property, including patent challenges and potential infringement claims - Inability to adequately protect proprietary technology or obtain/maintain issued patents could allow competitors to enter the market more directly, materially impacting the business[480](index=480&type=chunk) - Patent applications may not issue, issued patents may be challenged, deemed unenforceable, or circumvented, and the scope of protection may be insufficient[482](index=482&type=chunk)[483](index=483&type=chunk)[485](index=485&type=chunk) - The Company may infringe third-party intellectual property rights, leading to substantial damages, injunctions, or delays in product development and commercialization[490](index=490&type=chunk)[491](index=491&type=chunk) - Compliance with patent agency requirements is crucial; noncompliance can lead to loss of patent rights[497](index=497&type=chunk) - Lawsuits to protect or enforce patents are expensive, time-consuming, and may be unsuccessful, potentially invalidating patents or leading to narrow interpretations[498](index=498&type=chunk)[502](index=502&type=chunk) - Not seeking patent protection in all jurisdictions, or weak enforcement in foreign countries, could allow competitors to use technologies or export infringing products[503](index=503&type=chunk)[504](index=504&type=chunk)[506](index=506&type=chunk) - Dependence on licensed intellectual property means loss of rights due to breach or failure to meet deadlines could prevent continued development or commercialization of products[508](index=508&type=chunk)[512](index=512&type=chunk) - Licensed intellectual property from government-funded programs may be subject to 'march-in' rights, reporting requirements, and U.S. industry preference, limiting exclusive rights and manufacturing options[514](index=514&type=chunk)[516](index=516&type=chunk) - Changes in U.S. patent law (e.g., America Invents Act, Supreme Court rulings) could diminish patent value and impair the ability to protect products[521](index=521&type=chunk)[522](index=522&type=chunk)[524](index=524&type=chunk) - The CREATES Act exposes the Company to litigation and damages if it fails to provide sufficient product quantities for generic testing, potentially facilitating earlier generic competition[525](index=525&type=chunk) [Risks Related to our Industry](index=134&type=section&id=Risks%20Related%20to%20our%20Industry) This section outlines industry-specific risks, including healthcare regulations, data privacy, cybersecurity threats, and government agency disruptions - Healthcare regulations aimed at reducing costs, such as the ACA and IRA, could adversely affect revenue from ZURZUVAE sales and limit profitability through price controls, rebates, and negotiation programs[529](index=529&type=chunk)[530](index=530&type=chunk)[535](index=535&type=chunk) - The IRA's Medicare drug price negotiation program, effective 2026, could subject Sage's products to lower negotiated prices, impacting commercial payor negotiations and development decisions[535](index=535&type=chunk)[536](index=536&type=chunk)[538](index=538&type=chunk) - Failure to comply with Medicaid Drug Rebate Program or other governmental pricing programs could result in penalties, sanctions, and fines[454](index=454&type=chunk)[455](index=455&type=chunk) - The Company is subject to extensive healthcare laws and regulations (e.g., Anti-Kickback Statute, False Claims Act, HIPAA), with non-compliance potentially leading to criminal sanctions, civil penalties, and reputational harm[456](index=456&type=chunk)[457](index=457&type=chunk)[458](index=458&type=chunk)[459](index=459&type=chunk) - Data collection and privacy are governed by restrictive regulations (e.g., GDPR, CCPA), and non-compliance could result in fines, litigation, and reputational damage[464](index=464&type=chunk)[465](index=465&type=chunk)[466](index=466&type=chunk)[467](index=467&type=chunk)[469](index=469&type=chunk) - Improper promotion of off-label uses for products like ZURZUVAE could lead to significant liability and penalties[471](index=471&type=chunk) - Internal computer systems or networks, or those of third parties, are vulnerable to cyber security threats, potentially disrupting development programs, compromising sensitive information, and incurring significant liabilities[546](index=546&type=chunk)[548](index=548&type=chunk) - Inadequate funding or disruptions at government agencies (FDA, SEC) could hinder their ability to review and approve products, delaying commercialization and negatively impacting business operations[554](index=554&type=chunk)[556](index=556&type=chunk) - Misconduct by employees, contractors, or collaborators, including non-compliance with regulatory standards or insider trading, could lead to significant liability and harm the Company's reputation[559](index=559&type=chunk) [Risks Related to Our Financial Position and Need for Capital](index=143&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Capital) This section addresses risks related to the company's financial position, including accumulated losses and the ongoing need for additional capital - The Company has incurred significant operating losses since inception, with an accumulated deficit of **$3.1 billion** as of June 30, 2025, and anticipates continued losses for the foreseeable future[561](index=561&type=chunk)[562](index=562&type=chunk)[563](index=563&type=chunk) - Profitability depends on generating sustained product and collaboration revenue, which is uncertain due to factors like market acceptance, regulatory approvals, and commercialization success of ZURZUVAE and future products[565](index=565&type=chunk)[566](index=566&type=chunk) - Additional funding will be required to support ongoing operations, commercialization of ZURZUVAE, and pipeline development, which may not be available on acceptable terms or at all[567](index=567&type=chunk)[570](index=570&type=chunk) - Failure to obtain necessary capital could force delays, limitations, or termination of product development or commercialization efforts[575](index=575&type=chunk) - Raising capital through equity or convertible debt will dilute existing stockholders' ownership, and debt financing may impose restrictive covenants[573](index=573&type=chunk)[574](index=574&type=chunk) - Negative clinical trial results or commercialization setbacks can cause stock price declines, making future financing more difficult and dilutive[571](index=571&type=chunk) [Risks Related to Our Common Stock](index=146&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) This section addresses risks impacting the company's common stock, including market volatility, legal actions, and potential dilution - The market price of the Company's common stock is volatile and can fluctuate significantly due to factors such as commercialization results, clinical trial outcomes, regulatory decisions, competition, and macroeconomic conditions[577](index=577&type=chunk) - Ongoing legal actions, including a securities class action, SEC investigation, and derivative lawsuits, could distract management, incur substantial costs, or result in large judgments, negatively impacting the business and reputation[578](index=578&type=chunk)[579](index=579&type=chunk)[580](index=580&type=chunk)[582](index=582&type=chunk) - The Company has broad discretion in using its cash and proceeds from future offerings, which may not be used effectively and could cause the stock price to decline[583](index=583&type=chunk) - Anti-takeover provisions in charter documents and Delaware law could make an acquisition more difficult and prevent stockholders from replacing current management[584](index=584&type=chunk) - Future sales of common stock, including by significant stockholders like BIMA, could reduce the market price and impair the ability to raise additional capital[585](index=585&type=chunk) [Item 5. Other Information](index=148&type=section&id=Item%205.%20Other%20Information) This section confirms that no directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - No directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarterly period ended June 30, 2025[586](index=586&type=chunk) [Item 6. Exhibits](index=149&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Quarterly Report on Form 10-Q, including key agreements and certifications - The Exhibit Index lists documents such as the Agreement and Plan of Merger (Exhibit 2.1), Form of Cash Award Agreement (Exhibit 10.1), 2014 Employee Stock Purchase Plan (Exhibit 10.2), and various certifications (Exhibits 31.1, 31.2, 32.1)[589](index=589&type=chunk) - Certifications in Exhibit 32.1 are deemed to accompany the report but are not 'filed' for Section 18 purposes and are not incorporated by reference unless specifically stated[589](index=589&type=chunk) [Signatures](index=150&type=section&id=Signatures) This section contains the required signatures for the Quarterly Report on Form 10-Q, confirming its submission by the principal executive and financial officers - The report is signed by Barry E. Greene, Chief Executive Officer, President and Director (Principal Executive Officer), and Christopher Benecchi, Chief Operating Officer (Principal Financial and Accounting Officer), on July 30, 2025[593](index=593&type=chunk)[594](index=594&type=chunk)

Second Quarter 2025 Business and Financial Highlights [Executive Summary](index=1&type=section&id=1.1%20Executive%20Summary) Sage Therapeutics reported strong Q2 2025 results, driven by ZURZUVAE revenue, pending acquisition, and solid cash - Collaboration revenue from ZURZUVAE reached **$23.2 million** in Q2 2025, representing a **68% increase** from the first quarter[2](index=2&type=chunk)[6](index=6&type=chunk) - Supernus Pharmaceuticals' acquisition of Sage Therapeutics is expected to close in the **third quarter of 2025**[2](index=2&type=chunk)[9](index=9&type=chunk) - Cash, cash equivalents, and marketable securities stood at **$366 million** as of June 30, 2025[2](index=2&type=chunk)[10](index=10&type=chunk) - CEO Barry Greene stated that Q2 results reflect revenue acceleration driven by increased investment, strong execution, and growing momentum behind ZURZUVAE[3](index=3&type=chunk) [ZURZUVAE Commercial Performance](index=1&type=section&id=1.2%20ZURZUVAE%20Commercial%20Performance) ZURZUVAE, an oral PPD treatment, achieved significant Q2 2025 commercial growth, marked by increased prescriptions and broad payer coverage - ZURZUVAE was approved by the FDA in August 2023 and commercially available in the U.S. in December 2023[4](index=4&type=chunk) - Shipped greater than **4,000 prescriptions** to women with PPD in Q2 2025, a **36% increase** from Q1 2025, and over **13,500 since launch**[6](index=6&type=chunk) - OBGYNs accounted for approximately **80% of all ZURZUVAE prescriptions** in Q2 2025[6](index=6&type=chunk) - Greater than **95% of Commercial and Medicaid lives** are covered or have a path to coverage, with most having no step edits or complex prior authorizations[6](index=6&type=chunk) [Pipeline Development](index=1&type=section&id=1.3%20Pipeline%20Development) Sage Therapeutics advances its pipeline with SAGE-319 Phase 1 data expected by late 2025, NMDA receptor NAM platform exploration, and SAGE-324 indication evaluation - SAGE-319, a GABAA receptor PAM, is being investigated for behavioral symptoms in neurodevelopmental disorders, with Phase 1 multiple ascending dose (MAD) study data expected by **late 2025**[5](index=5&type=chunk) - The company is exploring its NMDA receptor negative allosteric modulator (NAM) platform, focusing on neurodevelopmental disorders with SAGE-817 and SAGE-039[7](index=7&type=chunk) - SAGE-324 is under evaluation for potential indications, including seizures in developmental and epileptic encephalopathies (DEEs), with an update expected in **mid-2025**[8](index=8&type=chunk) [Corporate Acquisition](index=2&type=section&id=1.4%20Corporate%20Acquisition) Sage Therapeutics announced a definitive agreement to be acquired by Supernus Pharmaceuticals via a tender offer, expected to close in Q3 2025 - Supernus Pharmaceuticals will acquire Sage for **$8.50 per share in cash** plus one non-tradable contingent value right (CVR) worth up to **$3.50 per share**[9](index=9&type=chunk) - The total consideration for the acquisition is up to **$12.00 per share**, or approximately **$795 million in aggregate**[9](index=9&type=chunk) - The CVR is payable upon achieving certain net sales and commercial milestones[9](index=9&type=chunk) - The transaction is expected to close in the **third quarter of 2025**[9](index=9&type=chunk) Second Quarter 2025 Financial Performance [Overview of Financial Results](index=2&type=section&id=2.1%20Overview%20of%20Financial%20Results) Sage Therapeutics reported a reduced net loss for Q2 2025, driven by increased ZURZUVAE collaboration revenue and lower R&D expenses, despite higher SG&A Net Loss Overview | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :----------------------- | :---------- | :---------- | :----------- | | Net Loss | $(49.7) million | $(102.9) million | $(53.2) million decrease | | Net Loss per share | $(0.79) | $(1.70) | $(0.91) decrease | Cash Position | Metric | June 30, 2025 | March 31, 2025 | Change (QoQ) | | :-------------------------------- | :------------ | :------------- | :----------- | | Cash, cash equivalents, marketable securities | $366 million | $424 million | $(58) million decrease | Revenue Overview | Metric | Q2 2025 | Q2 2024 | Change (YoY) | | :-------------------------- | :---------- | :---------- | :----------- | | Collaboration revenue (ZURZUVAE) | $23.2 million | $7.4 million | $15.8 million increase | | Other collaboration revenue | $8.5 million | $0.6 million | $7.9 million increase | | Total revenues | $31.66 million | $8.65 million | $23.01 million increase | - Research and development expenses decreased to **$23.7 million** in Q2 2025 from **$62.6 million** in Q2 2024, primarily due to 2024 and 2023 reorganization cost-saving measures[10](index=10&type=chunk) - Selling, general and administrative expenses increased to **$62.0 million** in Q2 2025 from **$56.0 million** in Q2 2024, mainly due to increased ZURZUVAE commercialization efforts and professional fees related to the strategic alternatives review process[14](index=14&type=chunk) [Condensed Consolidated Balance Sheets](index=6&type=section&id=2.2%20Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, Sage Therapeutics reported decreases across key balance sheet items, including cash, total assets, total liabilities, and total stockholders' equity, compared to December 31, 2024 Condensed Consolidated Balance Sheets (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Cash, cash equivalents and marketable securities | $365,572 | $504,418 | | Total assets | $422,922 | $547,222 | | Total liabilities | $54,185 | $82,133 | | Total stockholders' equity | $368,737 | $465,089 | [Condensed Consolidated Statements of Operations](index=6&type=section&id=2.3%20Condensed%20Consolidated%20Statements%20of%20Operations) For the three months ended June 30, 2025, Sage Therapeutics saw substantial revenue growth and a reduced net loss, despite higher SG&A expenses Condensed Consolidated Statements of Operations (in thousands, except per share data) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | :------------------------------- | | Product revenue, net | $0 | $600 | $0 | $2,289 | | Collaboration revenue - related party | $23,209 | $7,420 | $37,036 | $13,633 | | Other collaboration revenue | $8,451 | $634 | $8,688 | $634 | | **Total revenues** | **$31,660** | **$8,654** | **$45,724** | **$16,556** | | Cost of revenues | $(55) | $1,407 | $600 | $2,676 | | Research and development | $23,917 | $62,564 | $46,676 | $134,297 | | Selling, general and administrative | $61,997 | $55,983 | $119,589 | $108,556 | | Restructuring | $(230) | $0 | $283 | $0 | | **Total operating costs and expenses** | **$85,629** | **$119,954** | **$167,148** | **$245,529** | | Loss from operations | $(53,969) | $(111,300) | $(121,424) | $(228,973) | | Interest income | $4,323 | $8,431 | $9,546 | $17,634 | | Other income (expense), net | $(6) | $15 | $12 | $2 | | **Net loss** | **$(49,652)** | **$(102,854)** | **$(111,866)** | **$(211,337)** | | Net loss per share - basic and diluted | $(0.79) | $(1.70) | $(1.80) | $(3.50) | Additional Information [About Sage Therapeutics](index=3&type=section&id=3.1%20About%20Sage%20Therapeutics) Sage Therapeutics is a biopharmaceutical company dedicated to pioneering brain health medicines, notably developing the only two FDA-approved treatments for postpartum depression, and is headquartered in Cambridge, Massachusetts - Sage Therapeutics' mission is to pioneer solutions for life-changing brain health medicines[12](index=12&type=chunk) - The company has developed the only two FDA-approved treatments indicated for postpartum depression[12](index=12&type=chunk) - Founded in 2010, Sage Therapeutics is headquartered in Cambridge,

Core Viewpoint - Supernus Pharmaceuticals has announced the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act for its proposed acquisition of Sage Therapeutics, indicating progress towards completing the merger [1][3]. Acquisition Details - Supernus and Sage entered into a Merger Agreement on June 13, 2025, with the necessary premerger notifications filed with regulatory authorities shortly thereafter [2]. - The Offer to Purchase for Sage's outstanding shares is set at $8.50 per share in cash, plus a contingent value right (CVR) that could yield up to an additional $3.50 per share based on specific milestones [4]. Contingent Value Rights (CVR) - The CVR includes milestone payments contingent on the commercial success of the product ZURZUVAE, with payments structured as follows: - $0.50 per CVR upon the first commercial sale in Japan after regulatory approval by June 30, 2026 [5]. - $1.00 per CVR if net sales of ZURZUVAE reach $250 million in the U.S. by December 31, 2027 [6]. - $1.00 per CVR if net sales reach $300 million in the U.S. by December 31, 2028 [7]. - $1.00 per CVR if net sales reach $375 million in the U.S. by December 31, 2030 [8]. - The total maximum payout for each CVR is capped at $3.50, with no guarantee that any payments will be made [9][10]. Merger Completion - Upon completion of the Offer, Supernus plans to merge its wholly owned subsidiary with Sage, resulting in Sage becoming a wholly owned subsidiary of Supernus [11]. - Shares not purchased in the Offer will be converted into the right to receive the Offer Price, and Sage's shares will be delisted from NASDAQ [11]. Advisory Information - Moelis & Company LLC is the exclusive financial advisor for Supernus, while Goldman Sachs & Co. LLC serves as the exclusive financial advisor for Sage [12].

Core Viewpoint - The article discusses the investigation by Monteverde & Associates PC into the proposed sale of Sage Therapeutics, Inc. to Supernus Pharmaceuticals, Inc., focusing on the financial implications for current shareholders and the contingent value rights associated with the transaction [1]. Company Overview - Sage Therapeutics, Inc. is involved in a proposed sale to Supernus Pharmaceuticals, Inc. Current shareholders are set to receive $8.50 per share in cash, along with a non-tradable contingent value right worth up to $3.50 per share [1]. Financial Details - The contingent value right includes three potential cash payments: - $0.50 upon the first commercial sale of the drug Zurzuvae in Japan by June 30, 2026 - $1.00 when net sales of Zurzuvae reach or exceed $300 million in the U.S. by December 31, 2028 - $1.00 when net sales of Zurzuvae reach or exceed $375 million in the U.S. by December 31, 2030 [1]. Legal Context - Monteverde & Associates PC is recognized as a top firm in securities class action services and has a successful track record in recovering money for shareholders [1].

Core Viewpoint - Sage Therapeutics, Inc. (SAGE) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on upward revisions in earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which have shown a strong correlation with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance and Outlook - The recent upgrade for Sage Therapeutics reflects an improvement in the company's underlying business, suggesting that investors may respond positively by driving the stock price higher [5]. - Analysts have raised their earnings estimates for Sage Therapeutics, with the Zacks Consensus Estimate increasing by 1.4% over the past three months [8]. Zacks Rank System - The Zacks Rank system categorizes stocks based on earnings estimates, with only the top 20% of stocks receiving a "Strong Buy" or "Buy" rating, indicating superior earnings estimate revisions [9][10]. - Sage Therapeutics' upgrade to Zacks Rank 2 places it within this top 20%, suggesting potential for market-beating returns in the near term [10].

Core Insights - Supernus Pharmaceuticals (SUPN) has agreed to acquire Sage Therapeutics (SAGE) for $8.50 per share in cash, totaling approximately $561 million, with potential additional value through a contingent value right (CVR) of up to $3.50 per share, bringing the total potential value to $12 per share or around $795 million [1][7] Acquisition Details - The acquisition is expected to close in the third quarter of 2025, pending customary closing conditions [2] - Following the announcement, SAGE's shares increased by 35.4%, with the offer price representing a nearly 32% premium over SAGE's closing price of $9.07 on June 16 [2] - Year-to-date, SAGE shares have risen by 23.4%, contrasting with a 0.8% decline in the industry [4] Strategic Implications - The acquisition will provide SUPN with rights to SAGE's new depression drug, Zurzuvae (zuranolone), which is the first oral treatment approved for adults with postpartum depression (PPD) [5] - Zurzuvae was approved in August 2023 and launched commercially in December 2023 [5] - SAGE and Biogen (BIIB) share profits and losses from Zurzuvae's commercialization in the U.S., while Biogen records product sales in ex-U.S. markets and pays royalties to SAGE [6] Financial Projections - SAGE's collaboration revenues from Zurzuvae were $13.8 million in Q1 2025 and $36.1 million in 2024, with initial uptake exceeding expectations [8] - SUPN anticipates the acquisition to be accretive in 2026 and to enhance its neuroscience-focused portfolio [7][9] Competitive Landscape - Sage Therapeutics previously rejected a takeover offer from Biogen in January 2025, which was deemed to undervalue the company [10] - Biogen had offered $7.22 per share, representing a 30% premium over SAGE's closing price of $5.55 on January 10, 2025 [11] - It can be inferred that Supernus has outbid Biogen to acquire Sage Therapeutics [11]

Group 1 - Sage Therapeutics, Inc. shares increased by 35.4% to $9.07, following a significant trading volume, contrasting with a 2.8% loss over the past four weeks [1] - Supernus Pharmaceuticals has agreed to acquire Sage Therapeutics for $8.50 per share in cash, totaling approximately $561 million, with potential additional value bringing the total to $12 per share, or about $795 million [2] - The acquisition is expected to close in Q3 2025, subject to customary conditions, with Sage projected to report a quarterly loss of $0.96 per share, a year-over-year increase of 43.5%, and revenues expected to reach $17.34 million, up 100.5% from the previous year [3] Group 2 - The consensus EPS estimate for Sage Therapeutics has been revised slightly lower over the last 30 days, indicating a negative trend in earnings estimate revisions, which typically does not lead to price appreciation [5] - Sage Therapeutics holds a Zacks Rank of 3 (Hold), indicating a neutral outlook, while another company in the same industry, Compugen, has also maintained a Zacks Rank of 3 [6][7]

Summary of the Conference Call on Sage Therapeutics Acquisition Company and Industry - **Company**: Supernus Pharmaceuticals - **Acquisition Target**: Sage Therapeutics - **Industry**: Pharmaceuticals, specifically focusing on psychiatry and women's health Key Points and Arguments Acquisition Details - Supernus announced the acquisition of Sage Therapeutics for an offer price of **$8.5 per share in cash**, plus up to **$3.5 per share** based on specific milestones, totaling a potential value of **approximately $795 million** or **$12 per share** [5][7] - The transaction is expected to close in the **third quarter of 2025** [8] Financial Impact - The acquisition is projected to provide **immediate diversification of revenue** and accelerate top-line growth for Supernus [7] - Expected to be significantly accretive to adjusted operating income and earnings per share in **2026** [8][10] - Potential synergies from the transaction are estimated at up to **$200 million** annually [8][10] Strategic Rationale - The acquisition strengthens Supernus' psychiatry portfolio, adding **XERZUVEY**, an innovative product for postpartum depression (PPD) [9][10] - XERZUVEY is positioned as a new growth catalyst, expanding Supernus' reach into new channels, particularly targeting **OBGYNs** [9][10] - The transaction diversifies and increases Supernus' revenue base and cash flow, providing a long-term growth driver [10] Product Overview - **XERZUVEY** is the first and only oral treatment specifically indicated for PPD, showing rapid and sustained improvement in depressive symptoms [12][13] - Approximately **500,000 women** experience symptoms of PPD annually, with only **40% diagnosed** and **60% treated** [15] - The product has achieved **123% year-over-year growth** from Q1 2024 to Q1 2025, indicating strong initial launch momentum [17][20] Market Potential - The product is expected to become the **standard of care** for PPD, addressing a significant unmet need in the market [54][56] - Supernus plans to enhance awareness and treatment rates for PPD, leveraging its partnership with Biogen [16][20] Commercial Strategy - Supernus aims to capitalize on the existing commercial infrastructure of Sage and Biogen to sustain launch momentum and expand prescriber reach [9][20] - The company will focus on building referral networks between OBGYNs and psychiatrists to increase utilization of XERZUVEY [46][49] Relationship with Biogen - Supernus expects to maintain a strong collaboration with Biogen, which has been instrumental in the successful launch of XERZUVEY [42][43] - The partnership will continue to focus on expanding the product's market presence and addressing the needs of women suffering from PPD [42][50] Other Important Content - The acquisition is seen as a significant step for Supernus in accelerating mid- to long-term growth in revenues and cash flow [61] - The company emphasizes its commitment to both CNS and women's health markets, indicating a strategic expansion without abandoning its core focus [50][51] This summary encapsulates the key points discussed during the conference call regarding the acquisition of Sage Therapeutics by Supernus Pharmaceuticals, highlighting the strategic, financial, and market implications of the transaction.