Key highlights:
- Potential growth catalysts include planned 4Q 2023 launch of ZURZUVAE (zuranolone) and expected data read-outs for SAGE-718 and SAGE-324 in 2024.
- Approximately 40% workforce reduction supports focus on agile execution of business priorities.
- Strengthened financial position with expected annualised net savings of approximately $240 million anticipated to extend cash runway into 2026.
Sage Therapeutics, Inc announced late last week plans to reorganise its business operations and pipeline priorities to support goals for long-term business growth, including the planned commercial launch of ZURZUVAE for women with postpartum depression (PPD) in late 2023.
“Our goal is to think big, start small and scale fast as we look to launch ZURZUVAE and help women suffering with PPD. Executing on launch and our potential long-term growth catalysts requires us to allocate resources strategically,” said Barry Greene, Chief Executive Officer at Sage Therapeutics. “Part of our efforts to become a leaner and stronger company means having to reorganise our workforce. The departing employees contributed so much to our mission and I’m grateful for their incredible dedication to helping patients. Our business fundamentals are strong, we are well capitalised, and our goal is to put Sage in a solid position to optimise commercial execution and develop our pipeline with the goal of significant value creation.”
Following a strategic review, the company will:
- Refine pipeline development efforts to advance SAGE-718 and SAGE-324, as well as pause certain earlier-stage programs, with the goal of making evidence-driven investments
- Implement a ~40% workforce reduction designed to right-size the organisation as the company works to achieve sustained growth and allow for commercial hires to support the goal of a successful launch of ZURZUVAE to treat women with PPD
- Align its leadership team structure to scale with pipeline and commercial priorities
The changes to Sage’s leadership team are designed to help support the company’s future priorities. Al Robichaud, Sage’s Chief Scientific Officer since its founding in 2011, has decided to depart Sage. Al will remain as a scientific consultant and member of Sage’s Medicinal Chemistry and Pre-Clinical Scientific Advisory Boards. Mike Quirk will be promoted from SVP of Discovery Research to Chief Scientific Officer. In his new role, Dr. Quirk will lead Sage’s Research and Non-Clinical Development organisations. Jim Doherty, Chief Development Officer, also a founding member of Sage, will leave the company to pursue new opportunities.
Both Dr. Robichaud and Dr. Doherty were pivotal in the development of the scientific platforms that established the company’s robust brain health pipeline. Both leaders played key roles in helping move the company’s two approved compounds from early discovery through approval. Laura Gault, Chief Medical Officer, will assume Dr. Doherty’s responsibilities.
Chris Benecchi, Chief Business Officer, will oversee Medical Affairs following the departure of Mark Pollack, SVP of Medical Affairs who is leaving to pursue new opportunities. Dr. Pollack is a recognised thought leader in the psychiatric field and made significant contributions to Sage’s medical thought leader engagement strategy since joining Sage over a year ago.
“Our new Chief Scientific Officer, Mike, has been with Sage for almost a decade and will apply his deep knowledge of our science and relentless commitment to innovation on behalf of patients,” added Mr. Greene. “I also want to express my sincere gratitude for the exceptional impact that Al, Jim, and Mark have made for the company and for patients. Al and Jim have been with us from the very beginning and have inspired us all to push forward in some of the most challenging and rewarding areas of drug discovery and development.”
The reorganisation plan is intended to enable Sage to strengthen its balance sheet and position the company for long-term growth potential. Based on the post-reorganisation operating plan which includes Sage’s pipeline prioritisation, workforce reduction, and additional incremental commercial hires, the company expects:
- Annualised net savings of approximately $240 million, of which 60% is related to R&D
- A non-recurring charge of approximately $36 million to $38 million associated with the reorganisation, primarily incurred in the third quarter of 2023
- The potential to earn a milestone payment of $75 million from Biogen related to the first commercial sale of ZURZUVAE for the treatment of PPD
- Cash, cash equivalents, and marketable securities of approximately $1.0 billion as of June 30, 2023 along with anticipated funding from ongoing collaborations and potential revenue will support operations into 2026