Company Overview - Sage Therapeutics aims to be a top-tier biopharmaceutical company in the next 5 years[18] - The company has a rich pipeline across 3 franchises and goals of 2 or more IND-enabling programs per year by 2023[18] - Sage Therapeutics has over $2 billion in capital to fund efforts to impact an estimated >450 million patients globally[18] Depression Franchise (Zuranolone) - Approximately 70% of participants with positive response to an initial 2-week zuranolone treatment required at most one additional treatment during the 12-month SHORELINE study[34, 56] - In the SHORELINE study (30mg cohort), 42.9% of responders to initial treatment required only one course of zuranolone, while 25.6% needed 2 courses, 11.9% needed 3 courses, 10.8% needed 4 courses, and 8.8% needed 5 courses[56] - In the SHORELINE study, 23.9% exited the study with the primary reason of not achieving response in the first course of treatment[43] - In the 199 patients who received zuranolone 50 mg only, approximately 80.5% achieved response and 43.2% achieved remission after the initial 2-week treatment period[49, 52] Neurology Franchise (SAGE-324) - It's estimated that nearly 135 million people globally suffer from essential tremor (ET) or Parkinson's disease (PD)[67] - In an open-label, phase 1 study, a single dose of SAGE-324 resulted in nearly 50% tremor reduction in ET patients[69] - In the Phase 2 KINETIC Study, somnolence occurred in 68%, dizziness in 38%, balance disorder in 15%, diplopia in 12%, dysarthria in 12%, and gait disturbance in 12% of patients in the SAGE-324 treatment group[75] Neuropsychiatry Franchise (SAGE-718) - The 2020 economic burden of Alzheimer's disease in the US is estimated at ~$305 billion, compared to ~$200 billion in 2000[87]

[Form 10-Q Filing Information](index=1&type=section&id=Form%2010-Q) The company filed its Q1 2021 Form 10-Q, detailing its filer status and outstanding common stock - Sage Therapeutics, Inc filed its Quarterly Report on Form 10-Q for the period ended March 31, 2021[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) - The company is incorporated in Delaware and its common stock trades on The Nasdaq Global Market under the symbol SAGE[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) Filing Details | Indicator | Value | | :--- | :--- | | Commission file number | 001-36544 | | Shares of Common Stock Outstanding (as of April 27, 2021) | 58,480,018 | | Filer Status | Large accelerated filer | [Cautionary Note Regarding Forward-Looking Statements](index=2&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties, with no obligation to update - This report contains forward-looking statements subject to risks and uncertainties, covering ZULRESSO commercialization, clinical development, financial estimates, and the impact of COVID-19[6](index=6&type=chunk)[7](index=7&type=chunk)[8](index=8&type=chunk) - **Actual results may differ materially** from current expectations due to various factors detailed in the Risk Factors section, and the company assumes no obligation to update these statements[9](index=9&type=chunk) [Summary of Risks Related to our Business](index=3&type=section&id=Summary%20of%20Risks%20Related%20to%20our%20Business) The company faces significant risks in commercialization, regulatory approval, competition, and financing - Key risks include unsuccessful ZULRESSO commercialization, challenges in developing and gaining regulatory approval for product candidates, and the potential for adverse events[11](index=11&type=chunk)[12](index=12&type=chunk) - Further risks involve reliance on third-party manufacturers, market acceptance, competition, intellectual property protection, limited operating history, and the need for additional funding[13](index=13&type=chunk) - The **COVID-19 pandemic** continues to pose a significant risk, potentially impacting ZULRESSO sales and clinical trial execution[13](index=13&type=chunk) [PART I – FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20%E2%80%93%20FINANCIAL%20INFORMATION) This part presents the unaudited financial statements and management's analysis for the first quarter of 2021 [Item 1. Financial Statements (Unaudited)](index=6&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and accompanying notes for Q1 2021 [Condensed Consolidated Balance Sheets](index=6&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The balance sheets show a significant shift from cash to marketable securities and a decrease in total assets Condensed Consolidated Balance Sheets (in thousands) | Item | March 31, 2021 | December 31, 2020 | | :-------------------------------- | :------------- | :---------------- | | **Assets** | | | | Cash and cash equivalents | $899,250 | $1,661,082 | | Marketable securities | $1,104,767 | $438,467 | | Total current assets | $2,051,866 | $2,122,370 | | Total assets | $2,080,698 | $2,159,246 | | **Liabilities** | | | | Total current liabilities | $62,011 | $67,204 | | Total liabilities | $77,422 | $86,912 | | **Stockholders' Equity** | | | | Total stockholders' equity | $2,003,276 | $2,072,334 | - Cash and cash equivalents **decreased significantly** from $1.66 billion to $899.3 million, while marketable securities **increased** from $438.5 million to $1.10 billion[18](index=18&type=chunk) [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) The company's net loss improved year-over-year due to decreased operating expenses despite lower product revenue Condensed Consolidated Statements of Operations and Comprehensive Loss (in thousands) | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Product revenue, net | $1,583 | $2,286 | | Cost of goods sold | $187 | $170 | | Research and development | $58,056 | $63,610 | | Selling, general and administrative | $39,847 | $70,130 | | Total operating costs and expenses | $98,090 | $133,910 | | Loss from operations | $(96,507) | $(131,624) | | Net loss | $(95,764) | $(126,740) | | Net loss per share—basic and diluted | $(1.64) | $(2.44) | - Net product revenue decreased from $2.3 million in Q1 2020 to $1.6 million in Q1 2021[20](index=20&type=chunk)[185](index=185&type=chunk) - Total operating costs and expenses **decreased by $35.8 million**, primarily driven by reductions in SG&A expenses[20](index=20&type=chunk)[185](index=185&type=chunk) - The **net loss improved** from $(126.7) million in Q1 2020 to $(95.8) million in Q1 2021, resulting in a lower net loss per share[20](index=20&type=chunk)[185](index=185&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash flows show reduced operating cash burn but a significant use of cash for investing in marketable securities Condensed Consolidated Statements of Cash Flows (in thousands) | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(109,086) | $(136,691) | | Net cash provided by (used in) investing activities | $(658,816) | $206,270 | | Net cash provided by financing activities | $5,623 | $3,160 | | Net increase (decrease) in cash, cash equivalents and restricted cash | $(762,279) | $72,739 | | Cash, cash equivalents and restricted cash at end of period | $900,519 | $201,811 | - Net cash used in operating activities **decreased** from $(136.7) million in Q1 2020 to $(109.1) million in Q1 2021[22](index=22&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - Investing activities shifted from providing $206.3 million to **using $(658.8) million**, primarily due to increased purchases of marketable securities[22](index=22&type=chunk)[194](index=194&type=chunk)[195](index=195&type=chunk)[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=9&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Stockholders' equity decreased during the quarter primarily as a result of the net loss incurred Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share data) | Item | March 31, 2021 | December 31, 2020 | | :------------------------------------ | :------------- | :---------------- | | Common Stock Shares | 58,406,821 | 58,308,411 | | Additional Paid-in Capital | $3,137,164 | $3,109,807 | | Accumulated Deficit | $(1,133,258) | $(1,037,494) | | Total Stockholders' Equity | $2,003,276 | $2,072,334 | - Total stockholders' equity **decreased from $2.07 billion to $2.00 billion**, primarily due to a net loss of $95.8 million and unrealized loss on marketable securities[24](index=24&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations of accounting policies, financial components, and collaboration agreements [1. Nature of the Business](index=10&type=section&id=1.%20Nature%20of%20the%20Business) Sage is a biopharmaceutical company with one approved product, a clinical pipeline, and a history of operating losses - Sage Therapeutics is a biopharmaceutical company focused on brain disorders, with ZULRESSO® (brexanolone) CIV injection approved for PPD in the U.S[26](index=26&type=chunk)[27](index=27&type=chunk) - The company has incurred losses since inception, with an **accumulated deficit of $1.1 billion** as of March 31, 2021, except for a net income in 2020 due to the Biogen collaboration[30](index=30&type=chunk) - Existing cash is expected to fund operations for at least the next 12 months, but **additional financing will be required** thereafter[31](index=31&type=chunk) - The **COVID-19 pandemic** has negatively impacted ZULRESSO demand and could disrupt operations and development activities[32](index=32&type=chunk) [2. Summary of Significant Accounting Policies](index=11&type=section&id=2.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines key accounting policies for financial statement preparation, including revenue recognition - The condensed consolidated financial statements are prepared in accordance with GAAP for interim reports[34](index=34&type=chunk) - Management makes significant estimates and assumptions, particularly regarding the **impact of the COVID-19 pandemic** on sales, expenses, and clinical trials[37](index=37&type=chunk) - Revenue is recognized when control of goods or services is transferred, net of variable consideration like rebates and returns[41](index=41&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk) - Collaboration revenue is recognized by allocating the transaction price to distinct performance obligations, such as licenses and clinical material supply[42](index=42&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk)[47](index=47&type=chunk)[48](index=48&type=chunk) [3. Fair Value Measurements](index=17&type=section&id=3.%20Fair%20Value%20Measurements) This note details the fair value hierarchy and composition of the company's cash equivalents and marketable securities - Cash equivalents and marketable securities are classified within Level 1 and Level 2 of the fair value hierarchy based on observable inputs[66](index=66&type=chunk)[67](index=67&type=chunk) - As of March 31, 2021, most marketable securities had maturities of one year or less, with **no impairments** recorded during the period[71](index=71&type=chunk)[72](index=72&type=chunk)[73](index=73&type=chunk) Fair Value of Cash Equivalents and Marketable Securities (in thousands) | Item | March 31, 2021 (Total) | December 31, 2020 (Total) | | :-------------------------- | :--------------------- | :---------------------- | | Cash equivalents | $899,250 | $1,661,082 | | Marketable securities | $1,104,767 | $438,467 | | **Total** | **$2,004,017** | **$2,099,549** | Gross Unrealized Gains and Losses on Marketable Securities (in thousands) as of March 31, 2021 | Item | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Fair Value | | :-------------------------- | :------------- | :--------------------- | :---------------------- | :--------- | | U.S. government securities | $173,073 | $30 | $(6) | $173,097 | | U.S. corporate bonds | $346,021 | $118 | $(282) | $345,857 | | International corporate bonds | $202,848 | $70 | $(148) | $202,770 | | U.S. commercial paper | $170,803 | $4 | $(11) | $170,796 | | International commercial paper | $212,258 | $0 | $(11) | $212,247 | | **Total** | **$1,105,003** | **$222** | **$(458)** | **$1,104,767** | [4. Balance Sheet Components](index=20&type=section&id=4.%20Balance%20Sheet%20Components) This note details the composition of property and equipment and accrued expenses, noting key changes - Property and equipment, net, **decreased from $6.8 million to $4.2 million**, due to asset removals and a write-off from an early lease termination[74](index=74&type=chunk)[75](index=75&type=chunk)[76](index=76&type=chunk) - Accrued expenses decreased from $54.9 million to $51.4 million, primarily due to a **decrease in employee-related accruals**[78](index=78&type=chunk) Property and Equipment, net (in thousands) | Item | March 31, 2021 | December 31, 2020 | | :-------------------------- | :------------- | :---------------- | | Computer hardware and software | $1,302 | $2,758 | | Furniture and equipment | $964 | $1,865 | | Leasehold improvements | $6,559 | $9,220 | | Less: Accumulated depreciation | $(4,652) | $(7,088) | | **Total** | **$4,173** | **$6,755** | Accrued Expenses (in thousands) | Item | March 31, 2021 | December 31, 2020 | | :-------------------------- | :------------- | :---------------- | | Accrued research and development costs | $39,276 | $34,398 | | Employee-related | $3,640 | $14,769 | | Professional services | $7,817 | $5,184 | | Other | $687 | $500 | | **Total** | **$51,420** | **$54,851** | [5. Leases, Commitments and Contingencies](index=21&type=section&id=5.%20Leases%2C%20Commitments%20and%20Contingencies) This note outlines operating leases and various license agreements with milestone and royalty obligations - The company **terminated an operating lease** for office space in Cambridge, Massachusetts, during Q1 2021[81](index=81&type=chunk) - Under the CyDex license agreement, the company has paid **$1.0 million in licensing fees** and **$3.6 million in clinical/regulatory milestones**[83](index=83&type=chunk)[84](index=84&type=chunk) - For the University of California license agreements, the company pays royalties of **less than 1% on net sales** and has paid $0.3 million in milestones[86](index=86&type=chunk)[87](index=87&type=chunk) - The Washington University license agreement includes up to **$1.2 million in future milestones** and low single-digit royalties[89](index=89&type=chunk)[90](index=90&type=chunk) [6. Collaboration Agreements](index=23&type=section&id=6.%20Collaboration%20Agreements) This note details strategic collaborations with Shionogi and Biogen, including financial terms and revenue recognition - The Shionogi collaboration grants rights for zuranolone in Japan, Taiwan, and South Korea for a **$90.0 million upfront payment** and up to $485.0 million in milestones[92](index=92&type=chunk)[93](index=93&type=chunk) - The Biogen collaboration involves joint U.S development and commercialization of SAGE-217 and SAGE-324[99](index=99&type=chunk)[100](index=100&type=chunk)[104](index=104&type=chunk) - Sage received **$1.5 billion from Biogen**, comprising an $875.0 million upfront payment and a $650.0 million equity investment, with eligibility for up to $1.6 billion in future milestones[101](index=101&type=chunk)[102](index=102&type=chunk) - In Q1 2021, Sage recorded a **net reimbursement of $24.8 million from Biogen**, reducing R&D and SG&A expenses[113](index=113&type=chunk)[114](index=114&type=chunk) - The **$1.1 billion transaction price** for the Biogen collaboration was allocated to licenses and recognized as revenue in 2020[114](index=114&type=chunk)[116](index=116&type=chunk) [7. Common Stock](index=27&type=section&id=7.%20Common%20Stock) This note states the completion of a common stock sale to BIMA, generating $650.0 million in gross proceeds - On December 31, 2020, the company sold 6,241,473 shares of common stock to BIMA, generating **$650.0 million in gross proceeds**[121](index=121&type=chunk) [8. Stock-Based Compensation](index=28&type=section&id=8.%20Stock-Based%20Compensation) This note details equity incentive plans, award activity, and a year-over-year decrease in compensation expense - As of March 31, 2021, total unrecognized stock-based compensation expense for unvested RSUs was **$85.6 million**[132](index=132&type=chunk) - Total unrecognized stock-based compensation expense for unvested stock options was **$152.7 million**, expected to be recognized over a weighted average period of 2.41 years[133](index=133&type=chunk) - Stock-based compensation expense **decreased from $31.1 million in Q1 2020 to $22.0 million in Q1 2021**, primarily due to employee terminations[139](index=139&type=chunk) Stock-Based Compensation Expense (in thousands) | Category | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Research and development | $9,281 | $12,224 | | Selling, general and administrative | $12,695 | $18,886 | | **Total** | **$21,976** | **$31,110** | [9. Net Loss Per Share](index=30&type=section&id=9.%20Net%20Loss%20Per%20Share) This note presents the calculation of basic and diluted net loss per share, excluding anti-dilutive securities - Common stock equivalents totaling **8.3 million shares in Q1 2021** and 8.2 million shares in Q1 2020 were excluded from diluted EPS calculations as their effect would have been anti-dilutive[141](index=141&type=chunk) Net Loss Per Share (Basic and Diluted) | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss (in thousands) | $(95,764) | $(126,740) | | Weighted average common stock outstanding—basic and diluted | 58,374,219 | 51,908,760 | | Net loss per share—basic and diluted | $(1.64) | $(2.44) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section analyzes financial condition and results of operations, covering performance, pipeline, and liquidity [Overview](index=32&type=section&id=Overview) Sage is a biopharmaceutical company advancing its pipeline for brain disorders while facing continued operating losses - The company's pipeline includes zuranolone (SAGE-217) in Phase 3, SAGE-324 in Phase 2 for essential tremor, and SAGE-718 in Phase 2a for cognition-related disorders[145](index=145&type=chunk)[149](index=149&type=chunk)[151](index=151&type=chunk)[152](index=152&type=chunk)[153](index=153&type=chunk) - The SHORELINE Study for zuranolone showed that **over 70% of patients achieved positive response** after initial treatment[150](index=150&type=chunk) - SAGE-324's Phase 2 KINETIC Study met its primary endpoint, showing a **statistically significant 36% reduction** in upper limb tremor score versus placebo[152](index=152&type=chunk) - The company incurred a **net loss of $95.8 million** for Q1 2021 and had an accumulated deficit of $1.1 billion, expecting continued significant operating losses[156](index=156&type=chunk) [Financial Operations Overview](index=36&type=section&id=Financial%20Operations%20Overview) This section details revenue streams, operating expense components, and the financial impact of collaborations - ZULRESSO revenue has been negatively impacted by complex treatment requirements and the **COVID-19 pandemic**[162](index=162&type=chunk)[163](index=163&type=chunk) - A **workforce reduction in April 2020** has further limited ZULRESSO's revenue opportunity[164](index=164&type=chunk) - Collaboration revenue includes a **$90.0 million license fee from Shionogi** (2018) and **$1.1 billion from Biogen** (2020)[166](index=166&type=chunk)[167](index=167&type=chunk) - The Biogen collaboration resulted in a **$22.1 million reduction in R&D expenses** and a $2.7 million reduction in SG&A expenses for Q1 2021 due to net reimbursements[174](index=174&type=chunk)[184](index=184&type=chunk) - R&D expenses are expected to increase as product candidates advance, while SG&A expenses are expected to increase with potential future commercialization[173](index=173&type=chunk)[177](index=177&type=chunk)[183](index=183&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) This section compares Q1 2021 to Q1 2020, showing lower revenue but a reduced net loss due to cost-cutting Results of Operations (in thousands) | Item | Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | Increase (Decrease) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------ | | Product revenue, net | $1,583 | $2,286 | $(703) | | Cost of goods sold | $187 | $170 | $17 | | Research and development | $58,056 | $63,610 | $(5,554) | | Selling, general and administrative | $39,847 | $70,130 | $(30,283) | | Total operating costs and expenses | $98,090 | $133,910 | $(35,820) | | Loss from operations | $(96,507) | $(131,624) | $35,117 | | Interest income, net | $708 | $4,729 | $(4,021) | | Other income, net | $35 | $155 | $(120) | | Net loss | $(95,764) | $(126,740) | $30,976 | - Net product revenue from ZULRESSO **decreased by 30.7%** from $2.3 million in Q1 2020 to $1.6 million in Q1 2021[185](index=185&type=chunk)[186](index=186&type=chunk) - Total operating costs and expenses **decreased by $35.8 million (26.7%)**, driven by a $30.3 million (43.2%) decrease in SG&A expenses due to restructuring[185](index=185&type=chunk)[190](index=190&type=chunk)[191](index=191&type=chunk) - R&D expenses decreased by $5.6 million (8.7%) due to a **$16.8 million reimbursement from Biogen**, partially offset by increased clinical trial spending[185](index=185&type=chunk)[189](index=189&type=chunk) - **Net loss improved by $31.0 million (24.4%)** from $(126.7) million in Q1 2020 to $(95.8) million in Q1 2021[185](index=185&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) The company has sufficient liquidity for the next 12 months but will require additional future funding - As of March 31, 2021, primary liquidity sources were cash, cash equivalents, and marketable securities, totaling **$2.0 billion**[193](index=193&type=chunk) - Net cash used in operating activities was **$(109.1) million** in Q1 2021, while net cash used in investing activities was **$(658.8) million**[194](index=194&type=chunk)[195](index=195&type=chunk][197](index=197&type=chunk) - The company expects existing cash to fund operations for **at least the next 12 months** but anticipates needing substantial additional funding for future operations[199](index=199&type=chunk)[200](index=200&type=chunk) - Future capital requirements depend on ZULRESSO revenue, clinical trial progress, and collaboration payments, with potential for stockholder dilution from future financings[202](index=202&type=chunk)[203](index=203&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section discusses the company's primary market risk from interest rate fluctuations on its cash and investments - The company's primary market risk exposure is to **interest rate fluctuations** on its $2.0 billion in cash and marketable securities[212](index=212&type=chunk) - Due to the short-term nature of its investments, a sudden change in market interest rates is **not expected to have a material impact** on financial condition[212](index=212&type=chunk) - The company has **immaterial exposure to foreign currency exchange rates** and does not hedge against this exposure[213](index=213&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - As of March 31, 2021, management concluded that the company's disclosure controls and procedures were **effective** at the reasonable assurance level[217](index=217&type=chunk) - **No material changes** to internal control over financial reporting occurred during the period[218](index=218&type=chunk) [PART II – OTHER INFORMATION](index=49&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) This part covers legal proceedings, risk factors, and exhibits filed with the report [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) The company was not a party to any material legal proceedings as of the reporting date - As of March 31, 2021, the company was **not involved in any legal proceedings** expected to have a material adverse impact on its financial position or operations[220](index=220&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks related to product development, commercialization, IP, and financial position [Risks Related to Product Development, Regulatory Approval and Commercialization](index=49&type=section&id=Risks%20Related%20to%20Product%20Development%2C%20Regulatory%20Approval%20and%20Commercialization) This subsection outlines risks in drug development, regulatory approval, and commercialization, including COVID-19 impacts - ZULRESSO revenue is negatively impacted by **complex administration requirements** and the COVID-19 pandemic, creating significant barriers to treatment[222](index=222&type=chunk)[223](index=223&type=chunk) - The company's commercial strategy for ZULRESSO is expected to **substantially limit revenue growth**[225](index=225&type=chunk) - Drug development is a long, expensive, and uncertain process; **success in early trials may not predict later-stage success**, as shown by the MOUNTAIN Study failure[228](index=228&type=chunk)[229](index=229&type=chunk) - The **COVID-19 pandemic** continues to adversely impact ZULRESSO sales and development activities, potentially causing delays in clinical trials and supply chain operations[231](index=231&type=chunk)[232](index=232&type=chunk)[244](index=244&type=chunk)[245](index=245&type=chunk) - The company **relies completely on third-party suppliers** for manufacturing, posing risks related to compliance, supply disruptions, and IP protection[262](index=262&type=chunk)[263](index=263&type=chunk)[264](index=264&type=chunk)[265](index=265&type=chunk) [Risks Related to Our Intellectual Property Rights](index=73&type=section&id=Risks%20Related%20to%20Our%20Intellectual%20Property%20Rights) This subsection details risks associated with obtaining, enforcing, and defending intellectual property rights - The company's success depends on obtaining and maintaining patent protection, but there is **no assurance that patents will issue or be enforceable**[316](index=316&type=chunk)[317](index=317&type=chunk)[318](index=318&type=chunk)[319](index=319&type=chunk) - **Patent litigation is costly and time-consuming**, and successful infringement claims against the company could lead to substantial damages or halt commercialization[320](index=320&type=chunk)[321](index=321&type=chunk)[322](index=322&type=chunk)[323](index=323&type=chunk][326](index=326&type=chunk)[327](index=327&type=chunk) - The company is **dependent on licensed intellectual property**, and a breach of license agreements could result in the loss of critical rights[342](index=342&type=chunk)[346](index=346&type=chunk) - Changes in U.S patent law could **diminish the value of patents** and weaken the company's ability to protect its products[352](index=352&type=chunk)[353](index=353&type=chunk)[354](index=354&type=chunk) [Risks Related to our Industry](index=81&type=section&id=Risks%20Related%20to%20our%20Industry) This subsection addresses industry-specific risks from healthcare regulations, data privacy, and foreign market entry - **Healthcare regulations and drug pricing controls** could adversely affect revenue and limit profitability[357](index=357&type=chunk)[358](index=358&type=chunk)[361](index=361&type=chunk)[362](index=362&type=chunk)[363](index=363&type=chunk) - The company is subject to numerous healthcare laws (e.g, anti-kickback, False Claims Act), and **non-compliance could lead to significant penalties**[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk)[302](index=302&type=chunk)[303](index=303&type=chunk) - Strict data privacy regulations (HIPAA, GDPR, CCPA) impose complex obligations and **potential fines for non-compliance**[306](index=306&type=chunk)[307](index=307&type=chunk)[308](index=308&type=chunk) - Penetrating foreign markets subjects the company to additional regulatory burdens, price controls, and **political or economic instability**[310](index=310&type=chunk)[311](index=311&type=chunk)[312](index=312&type=chunk)[313](index=313&type=chunk)[314](index=314&type=chunk) [Risks Related to Our Financial Position and Need for Capital](index=83&type=section&id=Risks%20Related%20to%20Our%20Financial%20Position%20and%20Need%20for%20Capital) This subsection highlights the company's history of losses and the need for substantial additional funding - Sage has a limited operating history and has incurred significant losses, with an **accumulated deficit of $1.1 billion** as of March 31, 2021[367](index=367&type=chunk)[368](index=368&type=chunk) - The company expects to incur **increasing operating losses** for the foreseeable future due to substantial R&D and commercialization costs[369](index=369&type=chunk)[370](index=370&type=chunk) - While existing cash of $2.0 billion is expected to fund operations for at least 12 months, **additional funding will be required** thereafter[373](index=373&type=chunk)[374](index=374&type=chunk)[375](index=375&type=chunk) - **Failure to obtain necessary capital** could force delays or termination of development programs[375](index=375&type=chunk)[378](index=378&type=chunk) [Risks Related to Our Common Stock](index=85&type=section&id=Risks%20Related%20to%20Our%20Common%20Stock) This subsection addresses risks related to common stock volatility, use of capital, and anti-takeover provisions - The market price of the company's common stock is **volatile** and can fluctuate significantly due to clinical, regulatory, and commercial developments[380](index=380&type=chunk) - Management has **broad discretion in using existing cash**, which may not yield significant returns[381](index=381&type=chunk) - **Anti-takeover provisions** in charter documents could make an acquisition more difficult[382](index=382&type=chunk) - Future sales of a substantial number of common shares could **significantly reduce the market price** of the stock[383](index=383&type=chunk) [Item 6. Exhibits](index=87&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including agreements and officer certifications - Exhibits filed include a Separation Agreement, certifications of Principal Executive and Financial Officers, and Inline XBRL documents[384](index=384&type=chunk)[386](index=386&type=chunk) [SIGNATURES](index=88&type=section&id=SIGNATURES) The report is duly signed by the company's Principal Executive Officer and Principal Financial Officer - The report was signed on May 4, 2021, by Barry E Greene, Chief Executive Officer, and Kimi Iguchi, Chief Financial Officer[388](index=388&type=chunk)[390](index=390&type=chunk)

Sage Therapeutics, Inc. (NASDAQ:SAGE) Q4 2020 Earnings Conference Call February 8, 2021 8:00 AM ET Company Participants Barry Greene - CEO Jeff Boyle - Head-Investor Relations Mike Cloonan - Chief Operating Officer Kimi Iguchi - Chief Financial Officer Steve Kanes - Chief Medical Officer Conference Call Participants Laura Chico - Wedbush Securities Andrew Tsai - Jefferies Paul Matteis - Stifel Yatin Suneja - Guggenheim Partners Jay Olson - Oppenheimer Salveen Richter - Goldman Sachs Tazeen Ahmad - Bank of ...

Investor Presentation February 2021 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," or "continue," and other similar expressions. • Forward-looking statements in this presentation include statements regardin ...

Part I [Business](index=6&type=section&id=Item%201.%20Business) Sage Therapeutics develops brain disorder medicines, with **ZULRESSO®** for **PPD** and key pipeline assets **zuranolone** and **SAGE-324** - The company's primary focus is on modulating two critical central nervous system (**CNS**) receptor systems: **GABA** (major inhibitory) and **NMDA** (major excitatory)[23](index=23&type=chunk) - **Sage's** first product, **ZULRESSO®** (**brexanolone**), is an **IV-administered** treatment for **postpartum depression** (**PPD**) in adults, launched commercially in the U.S. in **June 2019**[24](index=24&type=chunk) - A strategic collaboration with **Biogen** was established in **December 2020** to jointly develop and commercialize **zuranolone** and **SAGE-324** in the U.S., with **Biogen** holding rights for most ex-U.S. territories[27](index=27&type=chunk) Key Product Pipeline Status | Product/Candidate | Indication(s) | Development Stage | Key Notes | | :--- | :--- | :--- | :--- | | **ZULRESSO® (brexanolone)** | **Postpartum Depression** (**PPD**) | Approved (U.S.) | **IV infusion**, **REMS program** required | | **Zuranolone (SAGE-217)** | **Major Depressive Disorder** (**MDD**), **PPD** | **Phase 3** | Oral compound, co-developed with **Biogen** | | **SAGE-324** | **Essential Tremor**, **Epilepsy**, **Parkinson's** | **Phase 2** | Oral compound, co-developed with **Biogen** | | **SAGE-718** | **Cognitive disorders** (**Huntington's**, **Parkinson's**, **Alzheimer's**) | **Phase 2a** | Oral **NMDA** modulator | | **SAGE-689 / SAGE-904** | **Acute GABA / NMDA hypofunction** | **Phase 1** | Early-stage candidates | [Our Strategy](index=7&type=section&id=Our%20Strategy) Strategy focuses on advancing multi-franchise opportunities in depression, neurology, and neuropsychiatry, leveraging collaborations - Advance **Phase 3** clinical development and regulatory activities for **zuranolone** in **PPD** and **MDD** in collaboration with **Biogen**[32](index=32&type=chunk) - Continue commercialization of **ZULRESSO** in the U.S., with a primary focus on geographies with existing, active treating sites[32](index=32&type=chunk) - Complete ongoing **Phase 2** studies for **SAGE-324** (**essential tremor**) and **SAGE-718** (**cognitive dysfunction**) to inform further development[32](index=32&type=chunk) - Support the **Biogen** collaboration for **zuranolone** and **SAGE-324** in the U.S. and **Biogen's** development efforts ex-U.S., alongside **Shionogi's** development of **zuranolone** in its licensed territories[33](index=33&type=chunk) [Sales and Marketing](index=15&type=section&id=Sales%20and%20Marketing) **ZULRESSO** sales are impacted by complex administration, **REMS**, and **COVID-19**, leading to restructured commercial operations - **ZULRESSO** commercialization faces significant barriers due to its administration as a **60-hour** continuous **IV infusion** requiring a certified healthcare setting under a **REMS program**[69](index=69&type=chunk) - The **COVID-19** pandemic has severely impacted **ZULRESSO** revenues by causing treatment sites to pause activities and reducing patient demand due to virus exposure concerns[70](index=70&type=chunk) - In **April 2020**, a **workforce reduction** eliminated the sales force, and commercial efforts are now focused on geographies with existing active **ZULRESSO** treating sites, which is expected to substantially limit revenue[71](index=71&type=chunk) - If **zuranolone** and **SAGE-324** are approved, **Sage** will jointly commercialize them in the U.S. with **Biogen**, sharing sales and marketing activities, profits, and losses equally[73](index=73&type=chunk) [Licenses and Collaborations](index=16&type=section&id=Licenses) **Sage** has key collaborations with **Biogen** for **zuranolone** and **SAGE-324**, and with **Shionogi** for **zuranolone** in Asia Key Collaboration and License Agreements | Partner | Product(s) | Key Financials | Territory | | :--- | :--- | :--- | :--- | | **Biogen** | **Zuranolone**, **SAGE-324** | **$875M** upfront, **$650M** equity investment, up to **$1.6B** in milestones, tiered royalties. **50/50** U.S. **profit/loss share** | U.S. (Joint), Ex-U.S. (**Biogen** exclusive, except **Shionogi** territory for **zuranolone**) | | **Shionogi & Co.** | **Zuranolone** | **$90M** upfront, up to **$485M** in milestones, tiered royalties | Japan, Taiwan, South Korea | | **CyDex Pharma** | **ZULRESSO** (**brexanolone**), **SAGE-689** | Milestone payments up to specified amounts, low single-digit royalties | Global (for **Captisol** formulation tech) | | **Univ. of California** | **ZULRESSO** (**brexanolone**) | Milestone payments, low single-digit royalties | Global (for patent rights) | | **Washington Univ.** | **SAGE-689** | Milestone payments, low single-digit royalties | Global (for patent rights) | [Government Regulation](index=24&type=section&id=Government%20Regulation) Extensive government regulation covers drug development, post-approval marketing, and healthcare compliance, including **REMS** and **DEA** scheduling - The **FDA** regulates drugs in the U.S. through a rigorous process involving non-clinical studies, an **Investigational New Drug** (**IND**) application, and multi-phase clinical trials before an **NDA** can be submitted for approval[128](index=128&type=chunk)[129](index=129&type=chunk) - **ZULRESSO** is subject to a **Risk Evaluation and Mitigation Strategy** (**REMS**) program to manage risks of excessive sedation and loss of consciousness, restricting its administration to certified healthcare settings[146](index=146&type=chunk) - **Brexanolone** (**ZULRESSO**) is classified as a **Schedule IV controlled substance** under the **Controlled Substances Act** (**CSA**), subjecting it to **DEA** regulations for manufacturing, storage, and distribution[163](index=163&type=chunk) - The company is subject to U.S. healthcare laws, including the federal **Anti-Kickback Statute** and the **False Claims Act**, which govern interactions with healthcare professionals and payors and prohibit off-label promotion[164](index=164&type=chunk)[311](index=311&type=chunk) [Risk Factors](index=45&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks, including **ZULRESSO** revenue challenges, pipeline development uncertainty, third-party reliance, and regulatory compliance - The company may never generate meaningful revenues from **ZULRESSO** due to significant barriers from its complex **IV administration**, **REMS program**, and the negative impact of the **COVID-19** pandemic[230](index=230&type=chunk)[231](index=231&type=chunk) - Future business prospects depend heavily on the successful development and regulatory approval of product candidates, especially **zuranolone**, which faces risks of clinical trial failure, as seen with the **MOUNTAIN Study** not meeting its primary endpoint[236](index=236&type=chunk)[237](index=237&type=chunk) - The company relies completely on third-party suppliers for manufacturing commercial and clinical drug supplies, posing risks related to quality control, regulatory compliance (**cGMP**), and supply chain disruptions[272](index=272&type=chunk)[273](index=273&type=chunk) - **Sage** is dependent on licensed intellectual property for certain products and may lose these rights if it breaches agreements. The company also faces risks of infringing on third-party patents and challenges to the validity of its own patents[355](index=355&type=chunk) - The company is subject to extensive healthcare regulations, including fraud and abuse laws, pricing and reimbursement programs (**Medicaid**, **340B**), and data privacy laws (**GDPR**, **CCPA**), non-compliance with which could result in significant penalties[310](index=310&type=chunk)[311](index=311&type=chunk)[317](index=317&type=chunk) [Properties](index=83&type=section&id=Item%202.%20Properties) Corporate headquarters are in Cambridge, Massachusetts, leasing approximately **103,436 square feet** of office space - Corporate headquarters are in Cambridge, MA, with a primary lease of **63,017 sq. ft.** expiring **August 31, 2024**[399](index=399&type=chunk) - An additional **40,419 sq. ft.** of office space is leased in a separate Cambridge, MA building, also expiring **August 31, 2024**[402](index=402&type=chunk) [Legal Proceedings](index=84&type=section&id=Item%203.%20Legal%20Proceedings) As of the filing date, **Sage Therapeutics** is not a party to any material legal proceedings or aware of any pending claims - The company is not currently a party to any legal proceedings and is unaware of any material pending or threatened claims[403](index=403&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=85&type=section&id=Item%205.%20Market%20for%20Registrant's%20Common%20Equity,%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) **Sage Therapeutics'** common stock trades on **Nasdaq**, with no cash dividends paid or anticipated, retaining earnings for business development - The company's common stock trades on the **Nasdaq Global Market** under the symbol "**SAGE**"[407](index=407&type=chunk) - The company has never paid or declared any cash dividends and does not intend to in the foreseeable future[414](index=414&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=87&type=section&id=Item%207.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In **2020**, **Sage** recorded net income of **$606.1 million**, driven by **$1.1 billion** in **Biogen** collaboration revenue and reduced operating expenses [Results of Operations](index=99&type=section&id=Results%20of%20Operations) Total revenue surged to **$1.11 billion** in **2020** due to **Biogen** collaboration, resulting in net income of **$606.1 million** Comparison of Results of Operations (2020 vs. 2019) | (in thousands) | 2020 | 2019 | Change | | :--- | :--- | :--- | :--- | | **Total revenue** | **$1,114,200** | **$6,868** | **$1,107,332** | | Product revenue, net | **$6,700** | **$3,957** | **$2,743** | | Collaboration revenue | **$1,107,500** | **$2,911** | **$1,104,589** | | **Total operating costs and expenses** | **$517,974** | **$714,992** | **($197,018)** | | Cost of goods sold | **$565** | **$400** | **$165** | | Research and development | **$292,714** | **$368,815** | **($76,101)** | | Selling, general and administrative | **$196,952** | **$345,777** | **($148,825)** | | Restructuring | **$27,743** | **$—** | **$27,743** | | **Net income (loss)** | **$606,073** | **($680,238)** | **$1,286,311** | - Collaboration revenue surged to **$1.1 billion** in **2020** from the **Biogen** agreement, consisting of an **$875.0 million** upfront payment and **$232.5 million** in excess proceeds from an equity investment[489](index=489&type=chunk) - R&D expenses decreased by **$76.1 million**, primarily due to the completion of the **zuranolone MOUNTAIN Study** and reduced spending on early-stage programs[495](index=495&type=chunk)[496](index=496&type=chunk) - SG&A expenses decreased by **$148.8 million**, mainly due to the **April 2020 restructuring** which reduced personnel-related costs and commercial activities for **ZULRESSO**[497](index=497&type=chunk) [Liquidity and Capital Resources](index=101&type=section&id=Liquidity%20and%20Capital%20Resources) As of **December 31, 2020**, **Sage** had **$2.1 billion** in cash, primarily from the **Biogen** agreement, sufficient for **12 months** of operations - As of **December 31, 2020**, the company had cash, cash equivalents, and marketable securities totaling **$2.1 billion**[504](index=504&type=chunk) Summary of Cash Flows (2020 vs. 2019) | (in thousands) | 2020 | 2019 | | :--- | :--- | :--- | | Net cash provided by (used in) Operating activities | **$664,280** | **($528,706)** | | Net cash provided by (used in) Investing activities | **$442,684** | **($143,156)** | | Net cash provided by Financing activities | **$426,762** | **$607,624** | - In **December 2020**, the company received **$1.5 billion** from **Biogen**, comprising an **$875.0 million** upfront payment and **$650.0 million** from a private placement of common stock[499](index=499&type=chunk)[503](index=503&type=chunk) - Management expects existing cash, cash equivalents, and marketable securities to be sufficient to fund operations for at least the next **12 months** from the filing date of the report[510](index=510&type=chunk) [Financial Statements and Supplementary Data](index=106&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains the company's audited consolidated financial statements for **2020** and the independent auditor's report [Report of Independent Registered Public Accounting Firm](index=110&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) **PwC** issued an **unqualified opinion** on financial statements and internal controls, identifying '**Accrued R&D Costs**' as a **Critical Audit Matter** - The auditor, **PricewaterhouseCoopers LLP**, issued an **unqualified opinion** on both the consolidated financial statements and the effectiveness of **internal control over financial reporting**[546](index=546&type=chunk) - The audit identified '**Accrued Research and Development Costs**' as a **Critical Audit Matter**, highlighting the significant management judgment and auditor subjectivity required to evaluate these estimates[555](index=555&type=chunk)[556](index=556&type=chunk) [Consolidated Financial Statements](index=112&type=section&id=Consolidated%20Financial%20Statements) As of **December 31, 2020**, total assets were **$2.16 billion**, with net income of **$606.1 million**, driven by **Biogen** collaboration Consolidated Balance Sheet Highlights (as of Dec 31, 2020) | (in thousands) | Amount | | :--- | :--- | | Cash and cash equivalents | **$1,661,082** | | Marketable securities | **$438,467** | | **Total Assets** | **$2,159,246** | | Total current liabilities | **$67,204** | | **Total Liabilities** | **$86,912** | | **Total Stockholders' Equity** | **$2,072,334** | Consolidated Statement of Operations Highlights (Year ended Dec 31, 2020) | (in thousands) | Amount | | :--- | :--- | | Total revenue | **$1,114,200** | | Total operating costs and expenses | **$517,974** | | Income from operations | **$596,226** | | **Net income** | **$606,073** | | **Net income per share—diluted** | **$11.43** | [Notes to Consolidated Financial Statements](index=116&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail **Biogen** collaboration revenue, **2020 restructuring** charge, and a full **valuation allowance** against **deferred tax assets** - **Biogen Collaboration:** The company recognized **$1.1 billion** in revenue in **Q4 2020**, comprising an **$875.0 million** upfront payment and a **$232.5 million** premium from **Biogen's** equity investment[700](index=700&type=chunk)[714](index=714&type=chunk)[718](index=718&type=chunk) - **Restructuring:** In **April 2020**, the company initiated a **restructuring plan**, eliminating approximately **53%** of its **workforce** and incurring a charge of **$27.7 million**[776](index=776&type=chunk) - **Income Taxes:** The company maintains a full **valuation allowance** of **$376.1 million** against its net **deferred tax assets** as of **Dec 31, 2020**, despite reporting taxable income for the year, due to its history of losses[766](index=766&type=chunk)[770](index=770&type=chunk) - **Stock-Based Compensation:** Total **stock-based compensation** expense was **$96.0 million** in **2020**, a decrease from **$153.2 million** in **2019**[751](index=751&type=chunk) [Controls and Procedures](index=106&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded **disclosure controls** and **internal control over financial reporting** were effective as of **December 31, 2020** - Management concluded that the company's **disclosure controls** and procedures were effective as of **December 31, 2020**[525](index=525&type=chunk) - Management concluded that the company's **internal control over financial reporting** was effective as of **December 31, 2020**, based on the **COSO framework**[526](index=526&type=chunk) - No changes in **internal control over financial reporting** occurred during the **fourth quarter of 2020** that have materially affected, or are reasonably likely to materially affect, internal controls[528](index=528&type=chunk) Part III [Directors, Executive Officers, Corporate Governance, Compensation, and Security Ownership](index=108&type=section&id=Items%2010,%2011,%2012,%2013%20and%2014) Information for **Items 10-14** is incorporated by reference from the forthcoming **2021 Proxy Statement** - Information regarding **Directors**, **Executive Officers**, **Corporate Governance** (**Item 10**), **Executive Compensation** (**Item 11**), **Security Ownership** (**Item 12**), **Certain Relationships and Related Transactions** (**Item 13**), and **Principal Accounting Fees and Services** (**Item 14**) is incorporated by reference from the forthcoming **2021 Proxy Statement**[532](index=532&type=chunk)[534](index=534&type=chunk)[535](index=535&type=chunk)[536](index=536&type=chunk)[537](index=537&type=chunk) Part IV [Exhibits, Financial Statement Schedules](index=109&type=section&id=Item%2015.%20Exhibits,%20Financial%20Statement%20Schedules) This section lists financial statements, schedules, and exhibits, including key material contracts and **CEO/CFO certifications** - The filed exhibits include key material contracts, such as the **Biogen Collaboration and License Agreement** and the **Biogen Stock Purchase Agreement**[785](index=785&type=chunk) - All required financial statements are filed as part of the report, while financial statement schedules have been omitted as they are not applicable or the required information is included elsewhere[539](index=539&type=chunk)

J.P. Morgan Healthcare Conference January 2021 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," or "continue," and other similar expressions. • Forward-looking statements in this presentation include statemen ...

Investor Presentation November 2020 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," "expect," "plan," "anticipate," "believe," "estimate," "project," "intend," "future," "opportunity", "goal", "potential," or "continue," and other similar expressions. Forward-looking statements in this presentation include statements regarding: our views and exp ...

Financial Data and Key Metrics Changes - Revenues for Q3 2020 were $1.6 million from sales of ZULRESSO, compared to $1.5 million for the same period in 2019, indicating a slight increase despite the impact of COVID-19 [30] - Selling, general and administrative expenses decreased to $35.1 million in Q3 2020 from $88.5 million in Q3 2019, primarily due to a reduction in commercial support for ZULRESSO following a restructuring [31] - Research and development expenses were $74.1 million in Q3 2020, down from $102.1 million in Q3 2019, attributed to the completion of the MOUNTAIN study and decreased spending on clinical pharmacology studies [31] - The net loss for Q3 2020 was $105.7 million, compared to $180 million for the same period in 2019 [32] - The company ended the quarter with $671 million in cash and equivalents, expecting to finish the year with approximately $550 million, providing a runway into 2022 [32] Business Line Data and Key Metrics Changes - The SHORELINE study for zuranolone in major depressive disorder (MDD) reported that 72% of patients achieved a response and 40% achieved remission after a 14-day treatment cycle with 30 mg [17] - For the 50 mg cohort, 75% of patients achieved a response and 48% achieved remission by the end of the initial treatment cycle [17] - The KINETIC study for SAGE-324 in essential tremor continues to enroll patients, with top-line data expected in Q1 2021 [25] Market Data and Key Metrics Changes - The ongoing COVID-19 pandemic has significantly affected ZULRESSO revenues, with expectations of continued adverse impacts even post-pandemic due to barriers to treatment [30] - The company anticipates a significant increase in the need for mental health treatments due to rising depression rates during the pandemic [68] Company Strategy and Development Direction - The company aims to disrupt the treatment model in depression and is focused on developing innovative therapies across its three franchises: depression, neurology, and neuropsychiatry [13] - The strategy includes advancing multiple clinical programs and maintaining a strong balance sheet to support operations and pipeline development [29] - The company is preparing for significant milestones over the next 12 to 18 months, with a focus on zuranolone as a potential first-in-class therapy for depression [23] Management's Comments on Operating Environment and Future Outlook - Management highlighted the increased demand for mental health solutions due to the pandemic and expressed confidence in the execution of clinical programs [9][10] - The management team is optimistic about the potential catalysts in the coming months, particularly regarding the SHORELINE study results [10][32] - The company is committed to delivering effective therapies for patients suffering from brain health disorders [28] Other Important Information - The company has a robust clinical pipeline with multiple studies ongoing, including the LUMINARY study for SAGE-718 in Alzheimer's disease, expected to begin dosing by the end of 2020 [27] - The management emphasized the importance of understanding patient populations that may respond best to treatments, particularly in the context of ongoing studies [41] Q&A Session Summary Question: Can you elaborate on SAGE-718 and its potential? - Management discussed SAGE-718 as a lead asset in the NMDA platform, highlighting its potential to improve cognitive function in various disorders [40] Question: What is the status of the REDWOOD study? - Management indicated that REDWOOD results will be needed for filing in the episodic pathway, with ongoing studies informing their understanding [46] Question: How do you view the essential tremor program's endpoints? - Management believes a 30% to 50% reduction in tremor amplitude would be clinically meaningful, based on previous studies [47] Question: Can you provide insights on the SHORELINE study results? - Management noted that nearly half of the patients did not require additional treatments within a year, indicating a persistent response in some patients [63] Question: What are the plans for the LUMINARY study? - Management confirmed that the LUMINARY study will focus on cognitive performance, with potential examination of event-related potentials [79]