Sage Therapeutics, Inc. (NASDAQ:SAGE) Q2 2022 Earnings Conference Call August 2, 2022 8:00 AM ET Company Participants Helen Rubinstein - IR Barry Greene - CEO Albert Robichaud - Chief Scientific Officer Chris Benecchi - Chief Business Officer Kimi Iguchi - CFO Conference Call Participants Ritu Baral - Cowen Paul Matteis - Stifel Ami Fadia - Needham Jay Olson - Oppenheimer Swapnil Malekar - Piper Sandler Yatin Suneja - Guggenheim Marc Goodman - SVB Leerink Gospel Enyindah-Asonye - Morgan Stanley Gary Nachman ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36544 Sage Therapeutics, Inc. (Exact name of registrant as specified in its Charter) (State or other jurisdiction of incorporati ...

Financial Data and Key Metrics Changes - The net loss for Q1 2022 was $122.1 million, with cash, cash equivalents, and marketable securities totaling $1.6 billion at the end of the quarter [54] - R&D expenses increased to $78 million in Q1 2022 from $58.1 million in the same period of 2021, driven by advancements in the pipeline beyond zuranolone [54] - SG&A expenses rose to $46.5 million in Q1 2022 compared to $39.8 million in Q1 2021, primarily due to hiring for ongoing activities in anticipation of future product launches [56] Business Line Data and Key Metrics Changes - The depression franchise is advancing with the rolling NDA submission for zuranolone in MDD, supported by six positive clinical trials [31][32] - The neuropsych franchise, led by SAGE-718, is progressing with six ongoing and planned Phase II studies targeting cognitive disorders [26][28] - The neurology franchise, led by SAGE-324, has initiated the Phase 2b KINETIC 2 study for essential tremor [51][52] Market Data and Key Metrics Changes - The prevalence of depression has increased significantly, with a three to fourfold rise in symptoms since the COVID-19 pandemic began [12] - Approximately one in eight mothers in the U.S. report experiencing symptoms of postpartum depression (PPD) each year, highlighting a substantial market need [13] Company Strategy and Development Direction - The company aims to become a leader in brain health and a top-tier biopharmaceutical company, focusing on innovative treatments for MDD and PPD [8][9] - There is a commitment to pioneering solutions for brain health, with a focus on partnerships with stakeholders to prepare for the market launch of zuranolone [18][19] - The strategy includes a fit-for-purpose launch for zuranolone, emphasizing data-driven insights and stakeholder engagement [19] Management's Comments on Operating Environment and Future Outlook - Management highlighted the ongoing brain health pandemic and the urgent need for novel therapies in mental health [8][10] - The company is optimistic about the potential of zuranolone to address unmet needs in treating MDD and PPD, with plans for NDA submissions in 2022 and early 2023 [15][33] - Management expressed confidence in the progress made across the pipeline and the potential for long-term value creation for patients and stakeholders [54][59] Other Important Information - The company recorded $20 million in reimbursement from Biogen related to their collaboration, which supports ongoing investments in their pipeline [57] - The company anticipates having approximately $1.3 billion in cash, cash equivalents, and marketable securities by the end of 2022, supporting operations into 2025 [58] Q&A Session Summary Question: Clinical rationale for extending the eligible window for SKYLARK study - Management explained that extending the window to 12 months allows for a wider patient enrollment without significantly changing the population characteristics [61][63] Question: Safety profile for zuranolone regarding somnolence - Management indicated that somnolence rates are dose-dependent, with low to high teens percentages observed, and noted that some degree of somnolence could be beneficial for patients with sleep challenges [68][71][72] Question: Physician feedback on SAGE-718 at AAN - Feedback was overwhelmingly positive, with excitement about the potential impact of SAGE-718 on patients suffering from cognitive impairment due to various neurological conditions [75][78] Question: Differences in trial design for SAGE-718 studies - Management highlighted that the PRECEDENT study is a placebo-controlled study with a longer dosing duration compared to earlier studies, designed to provide more robust data [83][85] Question: Rolling submission for zuranolone and labeling considerations - Management discussed the NDA rolling submission process and indicated that discussions with the FDA will focus on the treatment of MDD and PPD, with ongoing evaluations of potential labeling specifics [89][91]

Investor Presentation May 2022 Safe Harbor Statement • The slides presented today and the accompanying oral presentations contain forward-looking statements, which may be identified by the use of words such as "may," "might," "will," "should," "can,","expect," "plan," "anticipate," "believe," "estimate," "project," "intend," "future," "opportunity", "goal", "mission", "potential," "target", or "continue," and other similar expressions. • Forward-looking statements in this presentation include statements reg ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 001-36544 Sage Therapeutics, Inc. (Exact name of registrant as specified in its Charter) (State or other jurisdiction of incorporat ...

SAGE-718 Ongoing Study Designs March 2022 DIMENSION Study - SAGE-718 Placebo-controlled study in patients with early Huntington's disease Status Enrolling Objectives • To evaluate the effect of SAGE-718 on cognitive performance in participants with HD • To evaluate the effect of SAGE-718 on daily function in participants with HD Indication Huntington's Disease Cognitive Impairment Primary Endpoint • Change from baseline in Composite score of the Huntington's Disease Cognitive Assessment Battery (HD-CAB) Pha ...

Investor Presentation February 2022 Safe Harbor Statement • The slides presented today and the accompanying oral presentations contain forward-looking statements, which may be identified by the use of words such as "may," "might," "will," "should," "can,","expect," "plan," "anticipate," "believe," "estimate," "project," "intend," "future," "opportunity", "goal", "mission", "potential," "target", or "continue," and other similar expressions. • Forward-looking statements in this presentation include statement ...

Sage Therapeutics, Inc. (NASDAQ:SAGE) Q4 2021 Earnings Conference Call February 24, 2022 8:00 AM ET Company Participants Helen Rubinstein - Director, IR Barry Greene - CEO Jim Doherty - CDO Kimi Iguchi - CFO Chris Benecchi - CCO Conference Call Participants Andrea Tan - Goldman Sachs Tiffany Sun - JPMorgan Yasmeen Rahimi - Piper Sandler Laura Chico - Wedbush Securities Ami Fadia - Needham & Company Paul Matteis - Stifel Tazeen Ahmad - Bank of America Yatin Suneja - Guggenheim Douglas Tsao - H.C. Wainwright ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Sage Therapeutics focuses on brain health, with approved ZULRESSO for PPD and a pipeline led by zuranolone for MDD/PPD [Overview](index=6&type=section&id=Overview) Sage Therapeutics focuses on brain health, with ZULRESSO® for PPD and a pipeline led by zuranolone for MDD/PPD, supported by a Biogen collaboration - Sage's first product, ZULRESSO® (brexanolone), is an IV-administered treatment approved in the U.S. for adults with **postpartum depression (PPD)**[24](index=24&type=chunk) - The company's next most advanced candidate is zuranolone (SAGE-217), an oral compound for **major depressive disorder (MDD)** and **PPD**. An NDA for MDD is planned for submission in **H2 2022**, with a PPD filing anticipated in **H1 2023**[25](index=25&type=chunk) - Sage is jointly developing zuranolone and SAGE-324 in the U.S. with Biogen under a collaboration agreement effective **December 2020**. Biogen holds commercialization rights outside the U.S. (excluding specific territories for zuranolone licensed to Shionogi)[31](index=31&type=chunk)[32](index=32&type=chunk) - SAGE-324, a GABAA receptor modulator for **essential tremor**, has completed a Phase 2 study and is currently in a Phase 2b dose-ranging trial (KINETIC 2 Study)[33](index=33&type=chunk) - SAGE-718, an NMDA receptor modulator, is being developed for **cognitive impairment** in Huntington's disease (DIMENSION Study), Parkinson's disease (PARADIGM Study), and Alzheimer's disease (LUMINARY Study)[34](index=34&type=chunk)[35](index=35&type=chunk)[37](index=37&type=chunk) [Our Strategy](index=8&type=section&id=Our%20Strategy) The company aims to lead in brain health therapies by advancing zuranolone for MDD/PPD, optimizing ZULRESSO, progressing pipeline candidates, and leveraging collaborations - Seek U.S. regulatory approval for zuranolone in **PPD** and **MDD** and prepare for launch in collaboration with Biogen[40](index=40&type=chunk) - Continue commercializing ZULRESSO for **PPD** in the U.S., focusing on geographies with active treatment sites, and complete the SUNBIRD Study for potential at-home administration[40](index=40&type=chunk) - Advance clinical development of SAGE-324 for **essential tremor** (KINETIC 2 Study) and SAGE-718 for **cognitive impairment** in Huntington's, Parkinson's, and Alzheimer's diseases[40](index=40&type=chunk) - Support collaborations with Biogen for zuranolone and SAGE-324 in the U.S. and Biogen's territories, and with Shionogi for zuranolone in its licensed territories[41](index=41&type=chunk) - Continue research to identify new compounds and expand the intellectual property portfolio, while exploring further strategic collaborations or acquisitions[41](index=41&type=chunk) [Our Product Pipeline](index=11&type=section&id=Our%20Product%20Pipeline) Sage's pipeline features approved ZULRESSO for PPD, lead candidate zuranolone in Phase 3 for MDD/PPD, and other programs for essential tremor and cognitive disorders Sage Therapeutics Product Pipeline Status | Product/Candidate | Indication | Development Stage | | :--- | :--- | :--- | | **ZULRESSO® (brexanolone)** | Postpartum Depression (PPD) | Approved (U.S.) | | **Zuranolone (SAGE-217)** | Major Depressive Disorder (MDD) | Phase 3 (NDA submission planned H2 2022) | | | Postpartum Depression (PPD) | Phase 3 (SKYLARK Study ongoing) | | **SAGE-324** | Essential Tremor | Phase 2b (KINETIC 2 Study ongoing) | | **SAGE-718** | Huntington's Disease (Cognitive Impairment) | Phase 2 (DIMENSION Study ongoing) | | | Parkinson's Disease (Mild Cognitive Impairment) | Phase 2a (PARADIGM Study ongoing) | | | Alzheimer's Disease (Mild Cognitive Impairment/Dementia) | Phase 2a (LUMINARY Study completed) | | **SAGE-689** | Acute CNS Disorders (IM formulation) | Phase 1 | | **SAGE-319** | Social Interaction Disorders (Oral therapy) | Preclinical | | **SAGE-421** | Neurodevelopmental Disorders | Preclinical | [Manufacturing and Supply](index=17&type=section&id=Manufacturing%20and%20Supply) Sage relies entirely on third-party CMOs for manufacturing all supplies, with long-term agreements for ZULRESSO and preparations for zuranolone commercial production - The company does not own or operate any manufacturing facilities and relies completely on **third-party contract manufacturing organizations (CMOs)** for all supplies[81](index=81&type=chunk) - Long-term supply agreements are in place for ZULRESSO drug substance and drug product. For pipeline candidates like zuranolone, SAGE-324, and SAGE-718, manufacturing is managed through purchase orders under master service agreements[82](index=82&type=chunk)[83](index=83&type=chunk) - The company is currently working with CMOs to prepare for validation and commercial-scale manufacturing of zuranolone, contingent on regulatory approval[84](index=84&type=chunk) - The syntheses of ZULRESSO, zuranolone, SAGE-324, and SAGE-718 are considered reliable, reproducible, and amenable to large-scale manufacturing from readily available starting materials[85](index=85&type=chunk) [Sales and Marketing](index=17&type=section&id=Sales%20and%20Marketing) ZULRESSO sales are limited by complex administration and COVID-19, while Sage and Biogen prepare for zuranolone's potential U.S. commercialization - ZULRESSO sales have been negatively impacted by complex treatment requirements, including a **REMS program** mandating administration in a certified, medically-supervised healthcare setting over **2.5 days**[87](index=87&type=chunk)[88](index=88&type=chunk) - The **COVID-19 pandemic** has further compounded these barriers, reducing patient demand and site availability, with this adverse impact expected to continue[89](index=89&type=chunk) - The company's commercial strategy for ZULRESSO is now primarily focused on geographies with existing, active treating sites, which may limit the revenue opportunity[90](index=90&type=chunk) - Sage is actively working with Biogen on pre-launch and commercialization strategies for zuranolone. If approved, the companies will jointly commercialize the product in the U.S., with **Biogen booking sales**[92](index=92&type=chunk)[93](index=93&type=chunk) [Licenses and Collaborations](index=19&type=section&id=Licenses%20and%20Collaborations) Sage maintains key licenses with CyDex and the University of California, and major collaborations with Biogen for zuranolone/SAGE-324 and Shionogi for zuranolone in Asia - Sage has an exclusive license from CyDex Pharmaceuticals for its Captisol® drug formulation technology used in ZULRESSO (brexanolone) and SAGE-689, with obligations for milestones and **low single-digit royalties**[96](index=96&type=chunk)[98](index=98&type=chunk) - The collaboration with Biogen for zuranolone and SAGE-324 includes joint development and commercialization in the U.S. (**50/50 profit/loss split**) and exclusive rights for Biogen in most ex-U.S. territories. The deal involved an **$875 million upfront payment** and a **$650 million equity investment** in Sage[104](index=104&type=chunk)[105](index=105&type=chunk)[108](index=108&type=chunk)[113](index=113&type=chunk) - Sage is eligible for up to **$995 million in regulatory/commercial milestones** and up to **$600 million in sales milestones** from Biogen across both product classes, plus tiered royalties from ex-U.S. sales[109](index=109&type=chunk)[110](index=110&type=chunk) - A collaboration with Shionogi grants it rights to develop and commercialize zuranolone in Japan, Taiwan, and South Korea. Sage received a **$90 million upfront payment** and is eligible for up to **$485 million in milestones** and tiered royalties averaging in the **low to mid-twenty percent range**[116](index=116&type=chunk)[117](index=117&type=chunk) [Intellectual Property](index=22&type=section&id=Intellectual%20Property) Sage protects its technology through patents covering ZULRESSO, zuranolone, SAGE-324, and SAGE-718, with expirations into the 2030s, and may seek patent term extensions - The company holds an issued U.S. patent for a method of using its brexanolone formulation to treat PPD (expiring **2033**) and a U.S. patent for the dosage regimen (expiring **2037**)[126](index=126&type=chunk) - Zuranolone is covered by an issued U.S. patent for composition of matter (expiring **April 2034**) and an issued U.S. patent for solid forms (expiring **August 2037**), subject to potential extensions[126](index=126&type=chunk) - SAGE-324 has issued patents covering its composition of matter in Europe and Japan, expiring in **May 2035**[126](index=126&type=chunk) - The company may be eligible for patent term extensions under the Hatch-Waxman Act to compensate for time lost during regulatory review, potentially extending a patent's term by up to **five years**[127](index=127&type=chunk) [Competition](index=24&type=section&id=Competition) Sage faces intense competition across its portfolio, with ZULRESSO competing with standard antidepressants and zuranolone entering a crowded MDD market - ZULRESSO is the only therapy specifically approved for PPD, but competes with off-label use of standard antidepressants like **SSRIs** and **SNRIs**[131](index=131&type=chunk) - For MDD, zuranolone would compete with a wide range of antidepressants and potentially Axsome Therapeutics' NMDA receptor antagonist, AXS-05, which is under FDA review[132](index=132&type=chunk) - Key competitors in the GABAA neuroactive steroid space include **Marinus Pharmaceuticals (ganaxolone)** and **Praxis Precision Medicines (PRAX-114)**[133](index=133&type=chunk) - For essential tremor, SAGE-324 faces competition from current first-line treatments (**propranolol, primidone**) and pipeline candidates from Jazz Pharmaceuticals and Praxis[134](index=134&type=chunk)[135](index=135&type=chunk) [Government Regulation](index=25&type=section&id=Government%20Regulation) Sage's operations are extensively regulated by the FDA and other authorities, covering drug development, approval, manufacturing, marketing, and post-approval compliance, including pricing and reimbursement - The U.S. drug development process requires extensive non-clinical studies and three phases of clinical trials (**Phase 1, 2, 3**) before an NDA can be submitted to the FDA for marketing approval[141](index=141&type=chunk)[146](index=146&type=chunk)[149](index=149&type=chunk) - The FDA has granted zuranolone **Fast Track designation for PPD** and both **Breakthrough Therapy** and **Fast Track designations for MDD**, which can facilitate development and expedite review[55](index=55&type=chunk)[161](index=161&type=chunk) - Approved products like ZULRESSO are subject to post-marketing requirements, including potential Phase 4 trials and **Risk Evaluation and Mitigation Strategy (REMS) programs** to ensure safe use[157](index=157&type=chunk) - The company is subject to numerous healthcare laws, including the federal **Anti-Kickback Statute** and **False Claims Act**, which regulate interactions with healthcare professionals and payors and prohibit off-label promotion[173](index=173&type=chunk)[333](index=333&type=chunk) - Sales are dependent on coverage and reimbursement from third-party payors. The company must comply with pricing and rebate programs like the **Medicaid Drug Rebate Program** and the **340B drug pricing program**[220](index=220&type=chunk)[222](index=222&type=chunk)[225](index=225&type=chunk) [Employees and Human Capital](index=45&type=section&id=Employees%20and%20Human%20Capital) As of February 2022, Sage employed 471 full-time staff, with a focus on diversity, equity, and inclusion, offering comprehensive benefits and professional development - As of **February 16, 2022**, the company had **471 full-time employees**: **253 in research and development** and **218 in selling, general and administrative roles**[240](index=240&type=chunk) - The company is committed to diversity, equity, and inclusion. As of **year-end 2021**, approximately **61% of its U.S. workforce identified as female** and **28% as racially or ethnically diverse**[241](index=241&type=chunk) - Sage offers comprehensive benefits and professional development opportunities, and enhanced support in response to the **COVID-19 pandemic**, including increased time off and resources for remote work[242](index=242&type=chunk)[243](index=243&type=chunk) [Risk Factors](index=47&type=section&id=Item%201A.%20Risk%20Factors) Sage faces significant risks from limited ZULRESSO revenue, uncertain pipeline development, reliance on CMOs, intense competition, and future capital needs [Risks Related to Product Development, Regulatory Approval and Commercialization](index=47&type=section&id=Risks%20Related%20to%20Product%20Development%2C%20Regulatory%20Approval%20and%20Commercialization) Significant risks include limited ZULRESSO revenue, uncertain zuranolone development and approval, reliance on third-party manufacturing, intense competition, and challenges in market acceptance and reimbursement - The company may never generate meaningful revenues from ZULRESSO due to significant barriers, including its complex **2.5-day infusion administration**, a restrictive **REMS program**, and the continued adverse impact of the **COVID-19 pandemic**[253](index=253&type=chunk)[254](index=254&type=chunk) - Future prospects depend heavily on the successful development and regulatory approval of zuranolone. The company may not be successful in its plans to file for and obtain approval on expected timelines, or at all, as the FDA may find data insufficient or require additional trials[259](index=259&type=chunk)[266](index=266&type=chunk) - The company relies completely on **third-party suppliers for manufacturing**, and any failure by these suppliers to meet cGMP standards or pass regulatory inspections could significantly delay or halt product supply and development[292](index=292&type=chunk)[293](index=293&type=chunk) - Products may not achieve broad market acceptance or reimbursement at sufficient levels. Payors may impose restrictions, limit coverage, or require prior authorizations, which could impede product uptake and revenue generation[295](index=295&type=chunk)[296](index=296&type=chunk) - The company faces intense competition from existing therapies and pipeline candidates from other companies with greater resources, which could reduce the commercial opportunity for its products[309](index=309&type=chunk)[311](index=311&type=chunk) [Risks Related to Our Intellectual Property Rights](index=71&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property%20Rights) The company's success depends on securing and enforcing intellectual property, facing risks of patent invalidation, infringement claims, loss of licensed rights, and evolving patent laws - The company's success depends on its ability to obtain and maintain patent protection, but there is no assurance that pending applications will issue or that issued patents will be enforceable or provide a competitive advantage[351](index=351&type=chunk)[352](index=352&type=chunk)[354](index=354&type=chunk) - The company may infringe on the intellectual property rights of others, which could lead to costly litigation, substantial damages, and potentially prevent the commercialization of its products[361](index=361&type=chunk) - The company is dependent on licensed intellectual property for ZULRESSO and other candidates. Losing these rights due to breach of agreement or other factors could prevent the continued development or commercialization of these products[379](index=379&type=chunk) - Changes in U.S. patent law, such as the **America Invents Act** and various Supreme Court rulings, have increased uncertainty and could diminish the value of patents, impairing the ability to protect products[389](index=389&type=chunk)[390](index=390&type=chunk) [Risks Related to our Industry](index=80&type=section&id=Risks%20Related%20to%20our%20Industry) The company faces industry risks from healthcare cost-containment measures, drug pricing controls, and cybersecurity threats, which could impact profitability and operations - The company faces risks from healthcare reform and cost-containment measures, such as the **ACA** and other legislative proposals, which could impose price controls, restrict reimbursement, and negatively impact revenue and profitability[394](index=394&type=chunk)[395](index=395&type=chunk)[397](index=397&type=chunk) - Internal and third-party computer systems are vulnerable to security breaches and cyber-attacks, which could disrupt operations, compromise confidential data, and lead to significant financial and legal liabilities[401](index=401&type=chunk)[402](index=402&type=chunk) [Risks Related to Our Financial Position and Need for Capital](index=82&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Capital) Sage has a history of losses, uncertain profitability, and will require significant additional capital to fund operations, risking delays or termination of programs if funding is insufficient - The company has a history of significant operating losses, with an accumulated deficit of **$1.5 billion** as of **December 31, 2021**, and anticipates incurring losses for the foreseeable future[405](index=405&type=chunk)[406](index=406&type=chunk) - Future profitability depends on generating significant product revenue, which is uncertain and subject to numerous development, regulatory, and commercialization risks[408](index=408&type=chunk) - The company expects to require additional capital in the future to fund operations. Failure to obtain this funding on acceptable terms could force delays, limitations, or termination of product development or commercialization efforts[411](index=411&type=chunk)[416](index=416&type=chunk) - Raising additional capital may cause dilution to existing stockholders, and debt financing could impose restrictive covenants on the business[415](index=415&type=chunk) [Risks Related to Our Common Stock](index=84&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) The company's common stock price is highly volatile, influenced by clinical and regulatory outcomes, and future share sales or anti-takeover provisions could impact its value - The market price of the company's common stock is highly volatile and can be influenced by clinical trial outcomes, regulatory news, commercial results, and broader market conditions[418](index=418&type=chunk) - Anti-takeover provisions in the company's charter and under Delaware law could delay or prevent an acquisition, potentially hindering stockholder value[420](index=420&type=chunk) - Future sales of a substantial number of shares, such as those held by BIMA which become eligible for sale after **June 30, 2022**, could reduce the market price of the common stock[421](index=421&type=chunk) [Unresolved Staff Comments](index=85&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - None[422](index=422&type=chunk) [Properties](index=85&type=section&id=Item%202.%20Properties) The company's corporate headquarters are in Cambridge, Massachusetts, where it leases approximately 103,436 square feet of office space across two multi-tenant buildings, with both leases expiring on August 31, 2024 - The company leases **63,017 square feet** of office space for its corporate headquarters in Cambridge, Massachusetts, with the lease expiring on **August 31, 2024**[423](index=423&type=chunk) - An additional **40,419 square feet** of office space is leased in a separate building in Cambridge, Massachusetts, with this lease also expiring on **August 31, 2024**[424](index=424&type=chunk) [Legal Proceedings](index=86&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings and is not aware of any material claims or actions pending or threatened against it - The company is not a party to any legal proceedings and is unaware of any material pending or threatened claims[425](index=425&type=chunk) [Mine Safety Disclosures](index=86&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[426](index=426&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=87&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on the Nasdaq Global Market under "SAGE", with five stockholders of record as of February 16, 2022, and no cash dividends anticipated - The company's common stock began trading on the Nasdaq Global Market under the symbol **"SAGE"** on **July 18, 2014**[429](index=429&type=chunk) - As of **February 16, 2022**, there were **five stockholders of record**[430](index=430&type=chunk) - The company has never paid cash dividends and does not anticipate paying any in the foreseeable future[434](index=434&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=89&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Sage Therapeutics reported a net loss of $457.9 million for 2021, driven by the absence of 2020's $1.1 billion Biogen collaboration revenue, ending 2021 with $1.7 billion in cash [Results of Operations](index=103&type=section&id=Results%20of%20Operations) For 2021, Sage reported a net loss of $457.9 million, a shift from 2020's $606.1 million net income, primarily due to the absence of $1.1 billion in Biogen collaboration revenue Comparison of Results of Operations (2021 vs. 2020) | Financial Metric | 2021 (in thousands) | 2020 (in thousands) | Change (in thousands) | | :--- | :--- | :--- | :--- | | **Total Revenue** | **$6,308** | **$1,114,200** | **($1,107,892)** | | Product revenue, net | $6,308 | $6,700 | ($392) | | Collaboration revenue - related party | $0 | $1,107,500 | ($1,107,500) | | **Total Operating Expenses** | **$467,217** | **$517,974** | **($50,757)** | | Cost of goods sold | $553 | $565 | ($12) | | Research and development | $283,166 | $292,714 | ($9,548) | | Selling, general and administrative | $183,498 | $196,952 | ($13,454) | | Restructuring | $0 | $27,743 | ($27,743) | | **Income (Loss) from Operations** | **($460,909)** | **$596,226** | **($1,057,135)** | | **Net Income (Loss)** | **($457,892)** | **$606,073** | **($1,063,965)** | - The decrease in total revenue was driven by the **$1.1 billion in collaboration revenue from Biogen** recognized in 2020, which did not recur in 2021[520](index=520&type=chunk) - R&D expenses decreased by **$9.5 million**, primarily due to a **$79.8 million net reimbursement from Biogen**, which offset increased spending on zuranolone manufacturing and SAGE-718 development[524](index=524&type=chunk)[527](index=527&type=chunk) - SG&A expenses decreased by **$13.5 million**, mainly due to lower personnel costs following the 2020 restructuring and an **$11.3 million net reimbursement from Biogen**[526](index=526&type=chunk)[528](index=528&type=chunk) [Liquidity and Capital Resources](index=106&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2021, Sage had $1.7 billion in cash, cash equivalents, and marketable securities, with existing capital expected to fund operations for at least the next 24 months - As of **December 31, 2021**, the company's cash, cash equivalents, and marketable securities totaled **$1.7 billion**[532](index=532&type=chunk) Summary of Cash Flows (2021 vs. 2020) | Cash Flow Activity | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Net cash (used in) provided by Operating Activities | ($378,182) | $664,280 | | Net cash (used in) provided by Investing Activities | ($1,002,448) | $442,684 | | Net cash provided by Financing Activities | $13,334 | $426,762 | - The company expects its existing cash and collaboration funding to be sufficient to fund operating expenses and capital requirements for at least the **next 24 months** from the filing date of the report[539](index=539&type=chunk) - Future capital requirements will depend on many factors, including ZULRESSO revenues, costs for zuranolone's potential launch, and the progress of other pipeline candidates[541](index=541&type=chunk)[542](index=542&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=110&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate fluctuations on its $1.7 billion investment portfolio, though the short-term nature of these investments limits material impact, and foreign currency risk is immaterial - The company's primary market risk is interest rate fluctuations on its **$1.7 billion** in cash, cash equivalents, and marketable securities as of **December 31, 2021**[545](index=545&type=chunk) - Due to the short-term nature of its investments, management does not expect interest rate changes to have a material impact on the company's financial condition[545](index=545&type=chunk) - Exposure to foreign currency exchange rate risk is considered immaterial, and the company does not hedge this exposure[546](index=546&type=chunk) [Financial Statements and Supplementary Data](index=110&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2021 and PricewaterhouseCoopers LLP's unqualified opinion, highlighting accrued research and development costs as a critical audit matter [Report of Independent Registered Public Accounting Firm](index=114&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) PricewaterhouseCoopers LLP issued an unqualified opinion on Sage Therapeutics' 2021 consolidated financial statements and internal control over financial reporting, identifying "Accrued Research and Development Costs" as a critical audit matter - The auditor, PricewaterhouseCoopers LLP, issued an **unqualified (clean) opinion** on the consolidated financial statements and the effectiveness of internal control over financial reporting as of **December 31, 2021**[573](index=573&type=chunk) - The audit identified **"Accrued Research and Development Costs"** as a Critical Audit Matter. This was due to the significant management judgment required to estimate these costs, which in turn required a high degree of auditor judgment and effort to evaluate[581](index=581&type=chunk)[582](index=582&type=chunk) [Consolidated Financial Statements](index=116&type=section&id=Consolidated%20Financial%20Statements) The 2021 consolidated financial statements show total assets of $1.83 billion, a net loss of $457.9 million (compared to 2020's $606.1 million net income), and an accumulated deficit of $1.5 billion Consolidated Balance Sheet Data (as of Dec 31) | (in thousands) | 2021 | 2020 | | :--- | :--- | :--- | | Cash and cash equivalents | $294,233 | $1,661,082 | | Marketable securities | $1,448,063 | $438,467 | | **Total Assets** | **$1,825,288** | **$2,159,246** | | Total current liabilities | $85,193 | $67,204 | | **Total Liabilities** | **$96,257** | **$86,912** | | Accumulated deficit | ($1,495,386) | ($1,037,494) | | **Total Stockholders' Equity** | **$1,729,031** | **$2,072,334** | Consolidated Statement of Operations Data (Year Ended Dec 31) | (in thousands) | 2021 | 2020 | 2019 | | :--- | :--- | :--- | :--- | | Total Revenue | $6,308 | $1,114,200 | $6,868 | | R&D Expenses | $283,166 | $292,714 | $368,815 | | SG&A Expenses | $183,498 | $196,952 | $345,777 | | **Net Income (Loss)** | **($457,892)** | **$606,073** | **($680,238)** | | **Net Income (Loss) Per Share - Diluted** | **($7.80)** | **$11.43** | **($13.38)** | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=110&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports that there were no changes in or disagreements with its accountants on accounting and financial disclosure - None[550](index=550&type=chunk) [Controls and Procedures](index=110&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021, a conclusion affirmed by PricewaterhouseCoopers LLP's unqualified opinion - Management concluded that the company's disclosure controls and procedures were **effective** as of **December 31, 2021**[552](index=552&type=chunk) - Management concluded that the company's internal control over financial reporting was **effective** as of **December 31, 2021**, based on the COSO framework[553](index=553&type=chunk) - The effectiveness of internal control over financial reporting was audited by PricewaterhouseCoopers LLP, which issued an **unqualified opinion**[554](index=554&type=chunk) [Other Information](index=111&type=section&id=Item%209B.%20Other%20Information) This item is not applicable to the company - Not applicable[556](index=556&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=111&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20that%20Prevent%20Inspections) This item is not applicable to the company - Not applicable[557](index=557&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=112&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the company's 2022 proxy statement, and the company has adopted a Code of Business Conduct and Ethics - Information required by this item is incorporated by reference from the company's **2022 proxy statement**[559](index=559&type=chunk) - The company has adopted a **Code of Business Conduct and Ethics (Values Code)** applicable to all employees, officers, and directors[560](index=560&type=chunk) [Executive Compensation](index=112&type=section&id=Item%2011.%20Executive%20Compensation) Information concerning executive compensation is incorporated by reference from the company's definitive Proxy Statement for its 2022 annual meeting of shareholders - Information required by this item is incorporated by reference from the company's **2022 proxy statement**[561](index=561&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=112&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information regarding security ownership and equity compensation plans is incorporated by reference from the company's definitive Proxy Statement for its 2022 annual meeting of shareholders - Information required by this item is incorporated by reference from the company's **2022 proxy statement**[562](index=562&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=112&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information concerning related party transactions and director independence is incorporated by reference from the company's definitive Proxy Statement for its 2022 annual meeting of shareholders - Information required by this item is incorporated by reference from the company's **2022 proxy statement**[563](index=563&type=chunk) [Principal Accounting Fees and Services](index=112&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Information regarding principal accounting fees and services is incorporated by reference from the company's definitive Proxy Statement for its 2022 annual meeting of shareholders - Information required by this item is incorporated by reference from the company's **2022 proxy statement**[564](index=564&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=113&type=section&id=Item%2015.%20Exhibits%2C%20Financial%20Statement%20Schedules) This section lists the financial statements and exhibits filed with the report, with all financial statement schedules omitted as they are not applicable or included elsewhere - This item lists the financial statements and exhibits filed with the report. All financial statement schedules are omitted[566](index=566&type=chunk) [Form 10-K Summary](index=113&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable to the company - Not applicable[568](index=568&type=chunk)

J.P. Morgan Healthcare Conference January 2022 Safe Harbor Statement • The slides presented today and the accompanying oral presentations contain forward-looking statements, which may be identified by the use of words such as "may," "might," "will," "should," "can,","expect," "plan," "anticipate," "believe," "estimate," "project," "intend," "future," "opportunity", "goal", "mission", "potential," "target", or "continue," and other similar expressions. • Forward-looking statements in this presentation includ ...