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]