Good morning, and welcome to Sage Therapeutics First Quarter 2023 Financial Results Conference Call. Currently, all participants are in a listen-only mode. This call is being webcast live on the Investors and Media section of Sage’s website at sagerx.com. This call is the property of Sage Therapeutics, and recording, reproduction or transmission of this call without the express written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded.

I would now like to introduce Helen Rubinstein, Director of Investor Relations at Sage.

Helen Rubinstein — Director of Investor Relations

Good morning, and thank you for joining Sage Therapeutics First Quarter 2023 financial results conference call. Before we begin, I encourage everyone to go to the Investors and Media section of our website at sagerx.com where you can find the press release related to today’s call as well as the slides that we will be reviewing today.

I would like to point out that we will be making forward-looking statements which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially. Please review the risk factors discussed in today’s press release and in our SEC filings for additional detail.

We will begin the call with prepared remarks by Barry Greene, our Chief Executive Officer, who will provide an overview of our progress during the first quarter of 2023. We will also be joined by Jim Doherty, our Chief Development Officer, who will review recent progress in development activities across our program. Our Chief Business Officer, Chris Benecchi will provide an update on our preparations for the potential launch of zuranolone in MDD and PPD, and we will then be joined by Kim Iguchi, our Chief Financial Officer, who will review the financial results from the first quarter of 2023, Laura Gault, our Chief Medical Officer, will be available during the Q&A portion of the call.

With that, I’ll now turn the call over to Barry.

Barry Greene — Chief Executive Officer

Thanks, Helen, and thank you everyone for joining us this morning. At Sage, we are driven by our mission to develop brain health medicines that deliver what matters most to patients, so every person can thrive. We do this by acting with urgency and challenging scientific convention to think differently, as we work to develop new and effective treatments. This month marks mental health awareness month, which is an important reminder that the need for innovative brain health medicines have never been greater.

Depression is the leading cause of disability for young people and those in their prime working years. And the problem as we all know continues to grow. Alarming research published recently by the World Health Organization states that rates of suicide have increased in the U.S. by more than 40%. This is what mental health awareness month reminds us all that we must be more to challenge these trends. People with depression deserve better. Time has now proceeded to lead the way in making a difference for patients.

2023 will be a pivotal year for Sage and is already off to a strong start. We are laser-focused on preparing for the potential launch of zuranolone, and believe we’re on our way to achieving our vision of transforming the treatment of depression if zuranolone is [Indecipherable]. We’re also advancing our robust brain health pipeline comprised of several new chemical entity development candidates that is a result of our product engine. We believe our pipeline holds the potential to help millions of people suffering from brain health disorders, and deliver significant long-term value-creation. Importantly, our work is backed by a strong financial foundation that we believe puts us in a position to further our pipeline ambitions with a goal of being able to launch new drugs or new indications for years to come.

Looking forward, we have many key milestones on horizon. First, the NDA filing for zuranolone in MDD and PPD is under review by the FDA with a PDUFA action date of August 5. Now as I mentioned during our last earnings call, during this review period, we will not be making detailed comments on the potential label, FDA interactions or other related topics for zuranolone. As we prepare for the potential launch of zuranolone, we and Biogen are continuing permitted pre-launch commercialization activities. We’re actively engaged in discussions with payers and policymakers and collecting key insights from healthcare providers and patient advocates, with the goal of providing a model of care that works in the best interest of patients with MDD and PPD.

Additionally, our team and collaborators have presented data at several key meetings highlighting the negative impact of depression on patients, their families and society. These findings provide an important backdrop to our ongoing launch preparation. Chris will provide additional details on our ongoing and planned commercialization activities later in the call.

We and Biogen are also advancing SAGE-324 which we believe holds potential to provide differentiated benefits to patients with essential tremor and other movement disorders.

Now turning to neuropsych, we are making progress across our wholly-owned SAGE-718 and MDA PAM program. The SAGE-718, we are leading with Huntington disease, a devastating condition where deficits at executive function manifests during prime working years. We are also continuing to execute Phase 2 studies with SAGE-718 and cognitive impairment due to Parkinson’s and Alzheimer’s diseases.

To close, I’m very pleased with our achievements so far this year, and look-forward to continued progress in 2023. The time is now to unleash the potential for our science and making meaningful impact on the lives of millions.

With that, I’ll turn the call over to Jim for more detailed discussion of our recent portfolio progress and current clinical expectations. Jim, over to you.

Jim Doherty — Chief Development Officer

Thanks, Barry, and good morning, everyone. Over the first quarter, we have made important progress on our pipeline programs, and I am pleased to detail our recent investments and our plans for continued execution throughout 2023.

I’ll start with depression, where we are continuing to prepare for the potential launch of zuranolone in MDD and PPD. Our vision with zuranolone if approved is to transform the way depression is treated, and we know this will require support from many key stakeholders. Throughout the development journey with zuranolone, we have engaged with a broad set of key medical experts including gathering insights from key thought leaders. The feedback has been clear, they are increasingly recognizing that the episodic nature of depression means it could be treated as needed with treatment free periods between episodes.

Additionally, as we’ve engaged in discussions about the unmet need in depression, physicians continue to highlight that the potential to achieve both a rapid and sustained effect matters deeply to them, and remains critical to their patients. We have received consistent feedback on what they consider the main strengths of the zuranolone clinical data.

First, a robust clinical development program with approximately 3,500 subjects. Second, rapid onset of action seen in clinical trials with an improvement in depressive symptoms observed as early as day three. Third, improvement in depressive symptoms observed across multiple zuranolone use cases and patient populations in MDD and PPD. Fourth, a consistent safety and tolerability profile.

Additionally, physicians note that this clinical profile has the potential to be particularly impactful if zuranolone is approved, given zuranolone’s 14-day oral course of treatment. We believe that scientific forums will continue to play an important role in educating physicians on the clinical data seen to date with zuranolone.

We are also continuing to highlight data on the substantial economic burden associated with depression. In March, we presented important health economics and outcomes research at the Academy of Managed Care Pharmacy Annual Meeting. These data reinforce the significant negative impacts MDD can have on patients, their families and society. These presentations highlighted the association between MDD symptoms and reduced health-related quality of life scores, and the burden that extend to other adults living in a home with someone with MDD. They also showed the increase in all health-related and MDD related costs during the 90-day period following treatment with the current antidepressant.

Taken together, we believe these results reinforce the significant unmet need in MDD and PPD, and suggest an opportunity for new treatment options that have the potential to improve quality of life and reduce economic burden associated with depression.

Combined with additional research our team has presented and published over the last year, these data provide an important backdrop as we continue to engage with payers, policy makers and patient advocates in pursuit of transforming the way depression is treated.

Turning to neuropsychiatry, we announced earlier this quarter that our wholly-owned lead NMDA receptor PAM, SAGE-718 has been granted Orphan Drug Designation by the EMA, which follows the Fast-Track designation granted by the FDA in September 2021, in both cases, in Huntington’s disease.

These designations advance our strategy to prioritize HD as the lead indication for SAGE-718, where we are currently enrolling three studies. Population was chosen as the lead indication as it is a genetically-defined disorder, and thus is more homogeneous than other populations with cognitive impairment, and there is a strong scientific rationale to support the use of an NMDA receptor PAM.

Given the orphan nature of HD, we believe if our trials are successful, we have the potential to pave a novel regulatory pathway and to seek the globalized stage by pursuing an ex-US strategy in a more concentrated orphan space first.

We’re also continuing research into the HD patient journey and release, recently presented interim data at the CHGI [Phonetic] Annual Meeting from 95 patients in a new US-based HD real-world study in collaboration with Technical. This study is examining the impact of HD on patients’ activities of daily living where health-related quality of life, functional Independence and work productivity. The interim data cut demonstrated that patients with HD experienced cognitive impairment across all stages of the disease, impacting their independence and ability to function.

Additionally, we are investigating SAGE-718 in people with mild cognitive impairment due to Parkinson’s disease and people with mild cognitive impairment and mild dementia due to Alzheimer’s disease. These disorders represent some of the greatest areas of unmet need, and we know that globally that continue to become more prevalent and significantly disrupt lives.

As we’ve said, we expect data from the ongoing studies with SAGE-718 to start reading out in 2024, and we’ll share more detailed timelines when appropriate.

Our portfolio also includes SAGE-324, our lead neurology candidate. SAGE-324 is an investigational positive allosteric modulator of GABA A receptors with significant potential in the treatment of movement disorders like essential tremor. Along with our collaborator, Biogen, our goal is to complete enrollment in the ongoing Phase 2b KINETIC 2 dose-ranging study for SAGE-324 late this year.

We are also continuing to advance Phase 1 studies with a fast-acting balanced GABAA PAM, SAGE-689, and an extrasynaptic preferring GABAA PAM SAGE-319, as well as IND-enabling studies for our next NMDA PAM SAGE-421.

Importantly, of all of our product candidates, our Sage invented new chemical entities with differentiated profile designed with pharmacologic characteristics, that we believe are well suited to the target indications the program is pursuing. We believe that with our product engine, we have the potential to create significant long-term value for successful. 2023 is already off to a strong start, and I look forward to providing continued updates on our clinical execution throughout the remainder of the year.

Now, I’ll turn the call over to Chris to provide additional context on our planned approach as we prepare for the potential commercialization of zuranolone in MDD and PPD. Chris?

Chris Benecchi — Chief Business Officer

Thanks Jim. I’m pleased to be with all of you this morning to share updates on our preparations for the potential commercialization of zuranolone. With our NDA filing for zuranolone in MDD and PPD under agency review, we are closely collaborating with Biogen to advance permitted discussions with payers, continuing scientific exchange with HCPs and engaging with patient advocates. Further, we are building our internal capabilities by hiring experienced commercial leaders whose depth and breadth of knowledge further extend our commercial expertise. Together, these are important steps towards our goal of a rapid and successful launch of zuranolone.

Based on our PDUFA action date of August 5th, if there are no review extensions, and if zuranolone is approved, we expect the potential launch of zuranolone near the end of 2023 following an anticipated three-month DEA scheduling period. We will be prepared and anticipate entering a market that will be ready to think about the treatment of MDD and PPD differently.

Our vision with surround alone is to transform the way depression is treated. Focusing first on the PPD patient population, an estimated one in eight new mothers in the U.S. experienced the symptoms of PPD each year. That’s nearly 0.5 million women and their newborn babies and broader families who were adversely impacted during what should be one of the most treasured times for new parents. We believe zuranolone, if approved, holds unique potential to be a first-line therapy for many of these mothers who need help. Our goal with zuranolone, if we’re successful, is to provide HCPs with the first and only oral treatment specifically indicated for PPD, and to improve PPD diagnosis rates.

We understand this will require working with the entire healthcare ecosystem to change the diagnosis and treatment paradigm. We believe that if we are able to offer zuranolone as an oral 14-day treatment option, it may serve as a critical tool and catalyst for HCPs to diagnose and help mothers suffering from PPD.

Based on the compelling and versatile profile seen in the Landscape Clinical Program to date, we believe that zuranolone if approved has high transformative potential as a first-line treatment option for MDD, especially in certain populations like young adults, given the 14-day treatment course.

We understand that while there is significant unmet need among the entire MDD patient population, we will need to start our launch in a focused way given payer feedback in the current MDD market dynamics. Therefore, our planned strategy at launch is to focus our efforts on a subset of those 6.5 million patients already diagnosed with MDD, who are early in the course of their treatment and in need of a new medication as a first add-on or switch therapy.

While many believe that branded entrants to the MDD treatment market are often restricted to much later, use our payer, HCP, governance [Indecipherable] and patient advocacy discussions, all point to the potential for us to help a portion of those $6.5 million, with a first add-on or switch launch strategy.

Further, our launch strategy is designed to scale quickly with success, and we believe that over-time with focus and determination anchored to our data, zuranolone has the potential to become standard-of-care in the treatment of MDD.

To achieve our vision for zuranolone in MDD and PPD if approved, we must execute a fit-for-purpose launch that prioritizes deep and meaningful engagements with key stakeholders. We are advancing planned omnichannel efforts within digital core design C&I data from our content, media and in-person interactions. Our ambition is to strategically increase the impact, efficiency and agility of our execution through our sales force interactions and non-personal promotion.

We are powering this approach with predictive analytics, which are intended to deliver customized, personalized information to key stakeholders. It’s also vital that our omnichannel work directly reaches people with MDD and PPD at launch. Our planned efforts are intended to directly engage them with education and resources, so they are aware of zuranolone and are prepared to self-advocate in discussions with our HCPs. We believe that if zuranolone is approved, many people with MDD and PPD when armed with appropriate education and information, will ask their HCP about it by name.

Further, in order to be truly transformational, zuranolone must be accessible. Our market access team is engaging payers through permitted interactions. To date, we’re encouraged by the early enthusiasm we have seen in those interactions. Our goal, if zuranolone is approved, is to ensure patients with MDD and PPD who are prescribed it, can get it with minimal prior authorization and step added [Phonetic] requirements. As such, we’re continuing to explore the use of proactive value-based agreements that we believe may help provide the budget predictability that payers are looking for and favorable access for zuranolone.

We also know that early experience with zuranolone in the treatment of MDD and PPD will be a driver of a successful launch. Our goal is to enable positive first impressions for both patients with MDD and PPD and providers.

To support those positive experiences if zuranolone is approved, we plan to provide patient access and support service programs, which we believe will help patients with MDD and PPD navigate their zuranolone treatment journey.

As we continue to prepare for a potential launch later this year, I look-forward to sharing additional details on our plan and expectations for the launch of zuranolone. We are working diligently to deliver a novel treatment option for those living with MDD and PPD and are highly motivated with a sense of urgency, given the real-life impact of depression on people suffering from it and those who love them. We will be ready to execute if zuranolone is approved, inspired by our vision for zuranolone of transforming the way depression is treated.

Now, I’ll turn the call over for a review of our financials. Kimi?

Kimi Iguchi — Chief Financial Officer

Thanks, Chris. Our financial results for the first quarter of 2023 are detailed in our press release issued this morning. I’d like to take a moment to provide some context and highlight a few key points. We ended the first-quarter with a strong cash position, and have made important progress across our pipeline and launch preparation activities so-far this year. We have also seen continued growth in the use of ZULRESSO. I am proud that since its launch, we’ve been able to help hundreds of women with PPD with ZULRESSO.

We look forward to potentially expanding treatment options in PPD with zuranolone if approved. We are executing from a position of strength in a difficult macro-environment, as we prepare to support the potential commercialization of zuranolone and invest in development of our robust pipeline. As a reminder, as part of our collaboration with Biogen, we’re jointly developing zuranolone and SAGE-324 with a 50:50 cost-sharing in the United States.

We know that to achieve our vision of transforming the care of depression, we must begin with a focused strategy and be prepared to scale quickly with success, and we will remain mindful of capital allocation prior to potential launch.

Our net loss for the first quarter of 2023 was $146.8 million, and we ended the quarter with cash, cash equivalents and marketable securities of approximately $1.1 billion.

Turning to operating expenses, R&D expenses were $92.8 million in the first quarter of 2023. The increase compared to the first quarter of last year was primarily related to the hiring of employees and corporate infrastructure costs such as information technology costs to support the growth in our operations.

SG&A expenses were $65.7 million in the first quarter of 2023. The increase compared to the first-quarter of last year was primarily related to hiring employees to support ongoing activities in anticipation of the potential launch of zuranolone. We are also reaffirming that based on our current operating plan, we anticipate cash, cash equivalents and marketable securities, anticipated funding from ongoing collaborations and potential revenue will support operations into 2025. Included in this guidance is the potential to achieve milestones totaling $225 million from Biogen related to the first commercial sales of zuranolone in MDD and PPD.

As we said at the beginning of the year, given how dynamic we expect 2023 to be, including preparing for a potential launch, we’re not providing year end cash guidance at this time. However, looking forward, we expect that our spend will increase as we continue our ongoing and planned commercialization efforts, and advance plan and ongoing studies for our brain health pipeline throughout the year. As we approach crucial catalyst, I’m confident that our strong balance sheet will enable us to execute from a position of strength.

We have multiple upcoming potential value-creating milestones on the horizon, and we’re laser-focused on preparing to support the launch of zuranolone if approved. Backed by a strong balance sheet, we remain committed to making strategic investments in our developing pipeline programs and further establishing ourselves as a leader in brain health.

I’ll now turn it over to Helen to handle Q&A with the operator, Helen?

Helen Rubinstein — Director of Investor Relations

Thanks, Kimi. Before I turn it over to the operator, I’ll ask that you limit yourself to one question. If you have an additional question, please feel free to return to the queue. Now, I will turn it over to the operator to handle Q&A. operator?

Question & Answers

Operator

Thank you. [Operator Instructions] We’ll take our first question from Anupam Rama with J.P. Morgan.

Anupam Rama — J.P. Morgan — Analyst

Hey guys, thanks so much for taking the question. Just on the midyear SHORELINE update for zuranolone, can you remind us of what the focus will be here, and will this be presented in conjunction with the medical meeting. I think in your comments, you highlighted that scientific medical form remain kind of like really important on the medical education front. Thanks so much for taking the question.

Barry Greene — Chief Executive Officer

Yeah. Thanks for the question. So just on your last point, as our collaborators of Sage and people continue scientific exchange at congresses, it’s critically important for us to share information and get feedback from healthcare providers. And as I know you noted some of your notes, the volume of activity and the success of these items continue to grow, people are very excited, and if approved of zuranolone in the market, that’s growing and growing. SHORELINE gives you a critical piece of that, with [Indecipherable] will ask Jim to comment further, but the update is that we will include the rollover patients from CORAL. So, I’ll remind you that our CORAL is a Phase 2 study comparing zuranolone plus an antidepressant versus antidepressant, and we saw positive and specifically significant clinical meaningful results differentiated to day three, those patients have an opportunity to roll-over to SHORELINE and registered in whether the data are the same or slightly different in those arms. Jim, you want to take that.

Jim Doherty — Chief Development Officer

Of course, and thanks for the question, Anupam. Yeah, absolutely, the SHORELINE Study is a really important part of the overall [Indecipherable] program in-part because we get so much information out of it. Of course, we get a fair amount of safety data, given how large the study is, but perhaps even more importantly, it really answers a number of questions around how zuranolone will be used in the real world. And so as Barry said, what you’re seeing is an increasing amount of scientific exchange as we’re presenting data from what is a very large study. There are multiple cohorts and patients that have gone through the study. To Barry’s point, the last cohort to go through the study are patients who have had the opportunity to roll-over from the CORAL study, and what’s really interesting there is of course CORAL study has two arms, one with a standard of care antidepressant and another standard of care antidepressant plus zuranolone. Both of those arms have an opportunity to roll into SHORELINE Study. So, really get a good look at subjects who had been on a standard antidepressant and then start on zuranolone for the first time. So, we’re very interested to see the data. I think you can expect to see continue presentations around the SHORELINE Study for quite some time.

Helen Rubinstein — Director of Investor Relations

If we can take our next question.

Operator

Our next from Ritu Baral with TD Cowen.

Ritu Baral — TD Cowen — Analyst

Good morning, guys, thanks for taking the question. I wanted to ask on a couple of comments that I heard about the zuranolone in commercial strategy. One, Chris, I believe you mentioned something about a patient access and service program. Is this going to be something like a hub that we see for more specialty diseases with like reimbursement support, people work support, diagnostics support. And then just holistically between your comments and Barry, it sounds like there might be a DTC element out of the gate with something like this, given you mentioned that you expect patients to ask their doctors or clinicians about this. Is that something that I interpreted correctly? Thanks.

Barry Greene — Chief Executive Officer

Yeah, Ritu, thanks for the question. So, I will turn it over to Chris. But as we commented in our planned remarks, we’re starting with a very focused approach to zuranolone, this is an omnichannel for both personal and non-personal promotion, which will include a reaching out to potential patients directly, and as Chris said, we plan on scaling fast with success starting with [Indecipherable] think big, start small, scale fast there, but specifically to your patient access question, Chris, you want to take that?

Chris Benecchi — Chief Business Officer

Yeah, thanks, Barry. So good morning, Ritu. Our plan for launches to make sure that patients who need zuranolone are absolutely able to get it regardless of the nature of the patient’s payer status. And to that end, what we want to make sure that we do is that for patients at the time of launch, as they have a need for the product that we provide the appropriate access and reimbursement support services, to ensure that when that prescription gets filled, but that prescription actually gets adjudicated and the patient is able to get into the pharmacy for an affordable out of pocket. So having a full complement of patient access and support services is going to be absolutely paramount. I think also what’s going to be important is for physicians who want to experience the product to have access to not only the ability to prescribe the product, but to provide early experience, essentially a trial program for physicians to make sure that they gain that early experience at launch and are able to use it in the types of patients that they want to use it in.

I think in and around your question around DTC and DTP, obviously, more to come in and around DTC and DTP, but as Barry mentioned that there are patients waiting for this medication, we want to make sure that at the time of launch, we’re able to provide information and education directly to patients and to those suffering with MDD and PPD and access to tools and resources so that they can engage their clinicians in informed discussions as we go. Obviously, broader DTC is something that we would reserve for later in the launch, but focused DTC and DTP is definitely something that we want to make sure that we’re able to offer to omnichannel efforts at the time of launch.

Ritu Baral — TD Cowen — Analyst

Great, thank you.

Chris Benecchi — Chief Business Officer

Just around that, Ritu, you can understand that strategically and SHORELINE data are the group-wide where majority of people that respond to zuranolone didn’t need another medication for over a year, 80% required only the initial or second two-week course. It is really about physicians using zuranolone in their own hand and seeing impact with their own eyes in their patient population. We believe if the railroad is consistent with what we see in clinical trials, that some physicians will have the kind of comments you heard from people like Greg [Indecipherable] of St. Louis, things like, I’ve never seen these kind of reactions. Before that happens out in the real-world, we believe it well. This really is about physicians getting comfortable using zuranolone for the use to grow.

Operator

We’ll go next to Yasmeen Rahimi with Piper Sandler.

Yasmeen Rahimi — Piper Sandler — Analyst

Hi, good morning, team, and thank you so much for the remarks. I am going to stick with the topic of commercial preparation. Could you maybe provide a little bit color on sort of what you’re visualizing, sort of the size of the commercial team could be? What is the involvement or preparation that Biogen is taking through this process? How should we look at sort of the ramp of broadening and the team throughout the next 12 to 18 months. Appreciate any color sort of on that execution side of the arm and specifically also what are your partners doing to help you, and I’ll jump back into the queue.

Barry Greene — Chief Executive Officer

Thanks, Yas, for the question and really appreciate it. What I can say at this point, I’ll kick it over to Chris is that we and Biogen are highly aligned on the go-to-market plan and hiring plan and the kind of think big, start small, scale fast strategy. Chris, you want to take it?

Chris Benecchi — Chief Business Officer

Yeah, thanks, Barry. So good morning, Yas. Our ambition with the sales force is to really enable effective reach in frequency. As you might imagine, those clinicians who we believe will be new users of antidepressants like zuranolone, if approved, the group that we intend to target includes psychiatrists, OB-GYNs, a select group of primary-care physicians and nurse practitioners and PAs who are active in this market as well. Well, supplement, as Barry mentioned, our personal promotion efforts with a digital-first omnichannel efforts designed to deepen our reach and to provide frequency on an additional group of physicians who we believe that outside of the call universe that will reach with the sales force, need to absolutely hear the message because they have patients who are waiting as well for medications like zuranolone. We really believe that it’s imperative to deliver messaging because zuranolone on a broad group of these potential prescribers because patients with depression, as you might imagine, are waiting and deserve better. Now with respect to the comment about Biogen, as Barry mentioned, we’re in lockstep with Biogen around our go-to-market strategy with zuranolone, inclusive of how we think about deploying sales representatives at the time. Obviously, right now we’re thinking about deploying it at the time of effectively the PDUFA date, making sure that we have representatives in the field who are ready to go and are able to optimize the time in between the PDUFA date and the DEA scheduling, so that once the product is approved, both DEA scheduling, they’re ready to go with full promotion.

In terms of how we’re thinking about moving beyond that, obviously we’ll continue to read data and as the data reads out, we will think about scaling with success in specific physician groups that we see really early interest in it as we move forward.

Yasmeen Rahimi — Piper Sandler — Analyst

Thank you so much.

Operator

The next to Salveen Richter with Goldman Sachs.

Unidentified Participant — — Analyst

Hi, this is [Indecipherable] for Salveen, and this is my question. So, with regard to the commercialization strategy, could you provide some color on your plans for sampling as in providing samples to doctors to drive the uptake of zuranolone during the early months particularly, and if you expect sort of restrictions there given that you expect the DEA schedule for drug.

Barry Greene — Chief Executive Officer

Yeah, thanks for the questions. Please send our best to Salveen. As I said in the last question, it was the specific question, but as I said at the beginning, strategically, we believe that health-care provider experience treating patients with zuranolone and seeing the results with their own eyes is critical to our launch and long-term success. So, as you said, many access opportunity includes sampling will be a part of that overall strategy. Chris, you want to take it from there?

Chris Benecchi — Chief Business Officer

Yeah, it is a build, Barry. What I’d say is, it’s important that physicians, as we think about launching the medication, have a clear and compelling use case in mind, anchored to the zuranolone data, and they couple that use-case with early experience, as Barry mentioned, so that they get to see the impact that zuranolone can have in the specific patients that they want to use it in. So, with respect to how we think about that, we’re going to make available effectively, I thank you used the word samples, we would consider at a full-course therapy for a select group of patients, for physicians to actually experience the medication, to see the impact that it can have, because we believe that kind of experience is truly an amplifier to how they think about using it more broadly across their patient population.

Helen Rubinstein — Director of Investor Relations

If we can move on to our next question.

Operator

The next to Jay Olson with Oppenheimer.

Jay Olson — Oppenheimer — Analyst

Hey, congrats on the progress and thank you for the update. Can you just talk about the impact of the IRA on your development plans for SAGE-718, especially since it’s a potential pipeline in a molecule, what is the impact of the IRA on how you plan to develop broad indications either sequentially or in parallel. And also, if you could comment on the impact of the IRA on your plans for pricing zuranolone, that would be great. Thank you.

Barry Greene — Chief Executive Officer

Jay, thanks for the question. So, as we’ve said before, we think, while there are important positive components of the inflation reduction actions like through the co-pays, minimum pocket for patients who are in large it’s an asset. We must be friendly to innovation. The good news for state, however, is that we have a very robust product. So, it’s too early to share specifics in with zuranolone treatment for [Indecipherable] so I need to complete the life of that. But it is safe to say that we believe that innovators like Sage, whereas we can develop many, many molecules and many case [Phonetic] molecules are well suited to pave the way forward depending on how IRA is implemented. So, what that means is that for zuranolone we certainly could increase the use-case with other studies like general anxiety disorder or others, or we could take other molecules with differentiated pharmacology to develop them for future indications. Then it will be clear as IRA has implemented an we align with Biogen on the long-term use of both zuranolone and SAGE-324, but great question, Jay. And again, good news for Sage is that we’ve got a robust pipeline and a product engine capable of many, many products to come.

Jay Olson — Oppenheimer — Analyst

Great, thanks for taking the question guys.

Operator

We’ll go next to Paul Matteis with Stifel.

Paul Matteis — Stifel — Analyst

Hey, thanks so much for taking my questions. In your prepared remarks and talking to the commercial strategy, I find it really striking, you’re talking about positioning zuranolone as a first add-on antidepressant. I think pretty much any company in depression would love that to be the case, but it just seems to never happen historically. All these new drugs get stuck in the treatment of refractory population. So, I guess like point blank specifically, how are you actually going to do that? Are you making significant price concessions like, how is this going to play out? And then I wanted to just to ask Barry for just a quick comment on any thoughts, and I don’t know exactly what you can say on where Biogen is that as it relates to psychiatry. They are talking about that as a potential area for business development. They’ve talked about wanting revenue-generating assets. If they were to in-license a site drug, how might that impact Sage? And I guess how are you kind of thinking about whether or not that’s a good or bad thing for your positioning as you launch this product. Thanks so much.

Barry Greene — Chief Executive Officer

Thanks Paul, great question. Let me start with the second question, then I’ll pass the first one and then ask Chris. [Indecipherable] really advising about through strategy. What I can tell you from our interactions is that, Chris Viehbacher had significant experience with depression, giving us lots of days. On public record he is very excited about potential of zuranolone to help millions of patients, and is very bullish about the revenue consequences of helping millions. So all of that is very, very well aligned. In terms of how they grow and build the firm, that’s really the question you will have to ask Biogen. I can tell you that that a top, top, top priority advise right now is the successful ones of zuranolone, so we are very well aligned to that. From a sales perspective, as we think about a potential in-licensing, our bar is very, very high, and I don’t — I can’t speak for Biogen, but I expect to hold the bar very high as well, that’s certainly how we think about it.

In terms of in terms of positioning the zuranolone, we commented earlier in the call that strategically we and Biogen from the very beginning, aligned on proactive value-based agreements, and what that means is that we’re going to work with payers to give them budget predictability and that’s critical. If you think about launches, particularly launches we have as a brand, launches in generic areas, often payers because they don’t know how the drug will be used, put significant prior often steps in place really for fear of how rapidly the drug will grow and their inability to budget. We’re partnering with the payers to make that more predictable. And what we’ve heard from payers, and Chris will comment, is that for postpartum depression, since this will be the first approved — the first oral medicine ever specifically approved for PPD, that it doesn’t make sense for weeks or months on an unspecifically approved generic for PPD, if they can get better in few days and reconnect with baby, and the long-term health economic consequences of not having the mom connect with baby are severe, and we presented data on this.

In terms of MDD, what we are hearing from payers is that in certain use cases, young adults, the elderly, frontline might make sense, and there have been recent brand launches where about 10% to 15% of the drug abuse is frontline, but primarily at launch, we believe that in MDD, will be used with patients that are already diagnosed with MDD, that have tried something that are not yet satisfied with their level of wellness. Chris, you want to take it from there?

Chris Benecchi — Chief Business Officer

Thanks, Barry. So, Paul, I’ve been personally engaged with payers now for the better part of the year and a half, and those conversations initially started around unmet need and the MDD and PPD markets, and we haven’t had a payer yet that hasn’t acknowledged the unmet need in MDD and PPD, and we progress through two conversations around the compelling nature of the Landscape and NEST data, and what we saw in our clinical studies, and we’ve anchored our conversations in and around proactive value-based agreements and the potential impact of those agreements can have with respect to providing payers with predictability and budget certainty that they are so looking for. So, between the unmet need and the data from those studies, it’s really propelled conversations forward in and around how to think about BBA’s and contracting more specifically, as I mentioned, I’ve been personally engaged in conversations with national and regional payers inclusive of PBMs for quite some time, and what I can tell you is the byproduct of those discussions is there are significant payer interest in zuranolone.

At launch, we are working to have as many payers lined up as possible to make zuranolone accessible and from a medical policy perspective, as you noted, what payers are telling us is there is a clear and compelling use-case for zuranolone and PPD first line. In MDD, what they’re telling us is that there is a place in the line of therapy as a first add or first switch medication, and while they all acknowledge that clinicians may want to try something first-line before zuranolone, this is not the kind of medication in MDD, that they see being pushed off to third, fourth or fifth line, again that use-case is really specific for earlier lines of therapy. Now compare that with Axsome’s recent launch, what we’ve seen is restricted coverage, we’ve seen rejections and we’ve seen later-line of therapy use. I think there’s a number of reasons for that, but given the nature of how zuranolone works, there is a physician interest and urgency to use it, and a payer willingness to recognize the impact that it can have by allowing first-line use in PPD and first out of switching in MDD.

Paul Matteis — Stifel — Analyst

Awesome. Thank you guys. Appreciate it.

Operator

We’ll go next to Ami Fadia with Needham.

Eason Lee — Needham — Analyst

Hi, good morning. This is Eason Lee on for Ami. Thanks for taking our question. Maybe if I can ask one on 324. I guess there has been discussion from another company in the essential tremor space that the TETRAS ADL subscale maybe the preferred endpoint for regulatory purposes. I believe, based on your Phase 2b, the primary endpoint and some item for the performance of scale. So just curious what do you guys think is ultimately what the FDA wants to see it in terms of a registrational endpoints. Thank you.

Barry Greene — Chief Executive Officer

Yeah, it’s a great question. Please send our best to Ami. I’ll start on Jim’s comment further, so for SAGE-324, which is a GABAA PAM that we’ve developed specifically for chronic use in humans who are starting with essential tremor, we saw pretty spectacular result in the KINETIC study and that is statistically significant reduction in tremor scale, as he said, measured by TETRAS. We also saw specific alignment in activities of daily living, so while we haven’t hasn’t the Phase 3 discussion with FDA on the endpoint, we’ve got tremendous optionality depending on which way we want them both to go, given the data we have seen today. Jim, you want to come in?

Jim Doherty — Chief Development Officer

Yeah, and I think, Barry, you nailed the key point of what we’re seeing from the data are certainly clear results both from the primary endpoint, but also to the question that is matched by a similar effect on ADLs, and that’s really what you’re looking for here is that there is a benefit, a meaningful benefit to patients, and we believe that that is likely to be a key point and the regulators is thinking around the programs here. But look, this all comes out of the process that we’ve used to identify patient populations, who are most likely to benefit from these approaches. And that really didn’t lead to essential tremors, and so we’re seeing substantial reductions in tremor activity from the KINETIC study. So, we’re very excited about the opportunity for modulating the GABAA system with SAGE-324 as a truly novel way to treat essential tremor.

Eason Lee — Needham — Analyst

Right. Thank you.

Operator

We’ll go next to Sumant Kulkarni with Canaccord.

Sumant Kulkarni — Canaccord — Analyst

Good morning, thanks for taking my question. Clearly, zuranolone is a pathbreaking product for depression, and you mentioned your preliminary engagement with various stakeholders have been largely positive, but if there’s been any push-back or any portions of the value proposition of zuranolone that requires the most effort on convincing, what have those been about, and has that been from experts, payers or some other source?

Barry Greene — Chief Executive Officer

Yeah, Sumant, thanks for the question. I’ll ask Chris to comment, but what I can say is, temporarily, the feedback we’ve gotten is more and more positive as the day as [Indecipherable] been understood on all fronts. From the very beginning, patient and patient advocates pulled out to a significant unmet need with depression, even those that are on antidepressants stably aren’t well, they are just numbed. We’ve heard that two and half to three years ago from the beginning. I think the big change we’ve seen from key opinion leaders is that they’ve moved from a disbelief, there’s never been anything new in 35 years, other than modeling approaches, how can that be to a huge belief given the totality of data which you can SHORELINE that while there is a mew medicine that works quicker, and patients’ response earlier was two to three days, and the majority all required doing treatment and they were well. And we’ve got the [Indecipherable] as a support. So, I think we’ve seen a big a big shift. The push back historically had been, and how do I know when to retreat, and I think people understood and Laura has talked about this extensively. Well, the changes in the approach to treating depression doesn’t change the practice with management. We are still treating patients and monitoring them out going forward. From a payer perspective, and Chris highlighted earlier on the call, is payers all acknowledge the unmet need and realize when talking about the totality of zuranolone data, they are offering something very, very new in treatment paradigm. This is not the new entrant that might work a little faster, might offer a little [Indecipherable] completely new approach to depression. So, it’s not being looked at as the fourth, fifth, sixth, [Indecipherable] needs to be pushed to back line. Laura or Chris, anything to comment, may be Laura first.

Laura Gault — Chief Medical Officer

Yeah, so, I think as a clinician that has treated patients with depression, the thing that really strikes me about is relevant data, is the rapidity of the response and the durability of that response and how it will really change the conversation that you have with patients when you sit down with them and prescribe that initial treatment for depression. Instead of having a conversation about needing to wait for response from six to eight weeks, needing to be patient having to sort of hover through some of the side-effects that might occur early-on in treatment. You can have a conversation about expecting to feel well within a few days, and that really is going to change the conversation in the expectations of both physicians and patients.

Barry Greene — Chief Executive Officer

And Chris, you want to add something on that.

Chris Benecchi — Chief Business Officer

Yeah, I think there are three things that are going to drive our success from a healthcare provider and payer front. I think the first is giving physicians or healthcare professionals more broadly a clear and compelling use-case that’s really anchored to the data. I think Laura hit it nicely around the profile of zuranolone, and why it’s desirable for patients that are living with both MDD and PPD, and I think in the remarks in the slides that we shared, there are a number of use cases in there for patients with unresolved symptoms, patients who may have an adherence or a tolerability challenge, patients who actually may have issues with breakthrough symptoms and those that are living with elevated anxiety. So again, I think that clinical use case is essential. I think the second thing is to enable early experience where they get to see the power of the medication in their hands, and they get to have the patients’ feedback, and I think that’s to Barry’s point about when we’ve heard from investigators, the impact that they’ve seen by virtue of that experience has been really, really meaningful. And lastly, it’s working to enable broad and mitigated access without prior authorizations and step edits that are onerous using proactive EBAs to make sure that payers have the budget predictability and certainty that they’re looking for. I think when we do those three things successfully at launch, we’re going to have a very successful launch.

Barry Greene — Chief Executive Officer

Thanks Sumant.

Operator

We’ll go next to Vikram Purohit with Morgan Stanley.

Unidentified Participant — — Analyst

Hi, this this Steve [Indecipherable], thanks for taking our question. So, I wanted to ask about the scope of lifecycle innovation work you are conducting for zuranolone and what kind of study we can expect and what the data would look like. Thank you.

Barry Greene — Chief Executive Officer

Yeah, let me ask Jim to talk more about that.

Jim Doherty — Chief Development Officer

Absolutely. Of course, as we are moving forward with zuranolone, the goal is to sort of win in depression. And so, there are a number of patient populations through we think it benefits from zuranolone. I think you begin to think about, given the size of responses we’re seeing with zuranolone in MDD and PPD, as well as the robust effects we’re seeing in the patients on anxiety symptoms. You begin to think about other related anxiety disorders, depressive disorders as potential. But really, going to specifics, it is going to require some detailed discussions with our collaborator, Biogen. Those discussions are underway, and so as we get a little bit farther down the road and sort out the sequence of activity that will go to, we will lay those down for you. But, I think what we can certainly tell you is that there’s a lot of active discussion around which patient population in addition to MDD and PPD will take a benefit from zuranolone.

Operator

We’ll go next to Yatin Suneja with Guggenheim.

Eddie — Guggenheim — Analyst

Hi, good morning. This is Eddie on for Yatin. Thanks for taking my question. Just from a high-level, when we think about price per patient per year for zuranolone, should we be thinking about it in terms of treatment courses or some weighted-average of patient costs that would include some number of possible re-treatments? And then for PPD, should we expect a similar rate or yearly retreatment, and do you have data beyond SHORELINE to look at PPD re-treatments. Thanks.

Barry Greene — Chief Executive Officer

Yeah, great, great question. So, we been commenting on access before. You’ve heard Chris on this several times on this call already, it really starts with the proactive value-based agreements, and those provide some lift taking on our part and some budget predictability and price protection for payers. It is too early to talk about specific value-based agreement that every payers give for treatment. The context here is that what we’re hearing from payers is that it’s important for us to stay below that specialty tier. Since the Sovaldi launch years ago, every payer put automatic mechanism in place that people are in that special tier to put prior auth and steps in place. So [Indecipherable] stay below especially they’re talking about for patients here, not for pill or for pack, and that number is roughly around $10,000 per patient per year. So that’s broadly how we’re thinking about it. We then cycle that and think about the per pack-price. Now, it’s unlikely that and indication specific type pricing makes sense here, will be a price for the zuranolone pack of 14 days of 50 milligrams, that’s how we’ll think about price.

Yeah, you talked about retreatment data with PPD. So, right now what we’ve seen for the most part is that in both Phase 3 trials that demand that respond in day three and day 15 hold that response as days going by. So we expect that that will hold true in real-world.

Eddie — Guggenheim — Analyst

Got you and then just really quickly, I know in the SHORELINE, there were very few patients that needed multiple retreatments. But is there going to be a maximum number of yearly retreatments allowed maybe by the payer or from a safety standpoint.

Barry Greene — Chief Executive Officer

Yeah, that’s two questions, let me answer that that quickly. So, again, we said, we are not going to talk about the label. What you see typically in label, we’ve said this before is statements about zuranolone study and X amount of time, there is not study over X amount of time, things like that. We don’t think from a payer perspective, there’ll be any kind of restrictions.

Operator

And just as a reminder, please limit yourself to one question, and we’ll go next to Brian Abrahams with RBC.

Leonid Timashev — RBC — Analyst

This is Leonid on for Brian. Thanks for taking our question. I wanted to ask on some of the recent ended competitor launches and how you’re picking-up the learnings from those both on size of the market, targeting prescribers, potential detailing, and then also maybe just a quick follow-up, do you have any views on how zuranolone may pair with potentially antipsychotics given the growing role that classes playing in treating MDD and not necessarily just in combination with SSRIs and SNRIs. Thanks.

Barry Greene — Chief Executive Officer

Yeah, Leonid, thanks for the questions and please send our best to Brian. So, we are paying close attention to all the new launches, whether it’s migraine launches or depression launches, and we are grabbing a whole bunch of learning from those deals. Frankly many of what we’re seeing in the marketplace were highly predictable with given our analytics, but Chris, why don’t you take that.

Chris Benecchi — Chief Business Officer

Yeah, thanks, Barry. So, we, as you take a step back and you think about the launches, we pay, as Barry said, very close attention to all facets from the way that they target their customers, the size of the sales force, the tools and resources that they’re using to effectively manage their launch all the way through to external media and how they’re spending their media dollars, so we have quite a close lens trained on the various competitors and how they’re acting in the market. What I would take a step-back and say is that the approval in initial use of other products is really an encouraging signal that both patients and clinicians are really looking for therapies that work, in the case of Axsome’s product, it’s a therapy that they are looking at, because it has a new mechanism-of-action and works a little bit faster than maybe some of the other medications that have historically been available in the market for the last 30 to 35 years. I think this really demonstrates that there is unmet need for new treatment options for the management of MDD.

As you know, there still is no treatment and orally available treatment for PPD, and there is significant need there for a product like zuranolone. So, we anticipate that the opportunity for zuranolone to be used to manage the episodic treatment of depression is substantial, given the novelty of the product, potential indications that we would anticipate from our data, and we’re going to be prepared to go-to-market to deliver this medication for those living with MDD and PPD as quite a novel product and we’re thinking rather successfully about how we could enter the market and launch the product most effectively.

Laura Gault — Chief Medical Officer

So with regards to your question about use of zuranolone with atypical antipsychotics, I think it’s really important to consider the context in which atypical antipsychotics are used in depression, and that is they are typically used as an add-on treatment when patients have an insufficient response to their standard-of-care antidepressant which is usually an SSRI or SNRI. When physicians are in a position of having to treat a patient that hasn’t fully responded to that first dose of medication, they don’t have a lot of options, as there is not a lot of good data to support many of the options that they might consider. And so, they think long and hard before adding the antipsychotic on because of the side-effect profile. And so, as a physician myself, when I think about zuranolone is going to be used in the treatment paradigm, given the efficacy data that we’ve demonstrated in use both as mono and add-on, and the side-effect profile of zuranolone, which is certainly different and has much fewer side-effects related to metabolic syndrome and waking compared to atypical antipsychotics. It’s my belief as a physician that zuranolone could be used as an add-on or ahead of atypical antipsychotics.

Barry Greene — Chief Executive Officer

Yeah, Leonid, thanks for the question, or as monotherapy. The key that we see in the pricing, Laura said as well as when patients don’t respond well or becomes about polypharmacy, and as you know, polypharmacy in patient populations is continuing to be an issue, particularly people’s age in tolerating the medication. So, the opportunity to use medication like zuranolone every night for 14 days get well and patients respond and stay well without continue medication as a chronic therapy this huge.

Operator

We’ll go next to Neena Bitritto-Garg with Citi.

Neena Bitritto-Garg — Citi — Analyst

Hey guys, thank you for taking my question. Just kind of a follow-up to the last question, just wondering how you educate, I guess, patients and physicians on the need to actually take the full two-week course. I guess what I’m trying to get at is, is there a risk that patients take a few days off of dosing, kind of get well within that two to three day period and then decide to stop dosing until they need to retreat again or simply taking kind of their own treatment into their own hands and treating up as needed as they see effect. I guess any thoughts on that would be helpful.

Barry Greene — Chief Executive Officer

Yeah, Neena, thanks for the question. I will ask Laura to answer that.

Laura Gault — Chief Medical Officer

Yeah, so I think that this is a question of educating prescribers and patients on the importance of finishing the 14-day course. That is the treatment course that was studied in clinical trials and supports the advocacy and benefits that zuranolone has demonstrated. So, it will really be about making sure that the patient understands the need to finish that 14-day course.

Barry Greene — Chief Executive Officer

Thanks, Neena.

Operator

We’ll go next to Tim Lugo with William Blair.

Tim Lugo — William Blair — Analyst

Hey, thanks for squeezing me in. When you talk about proactive value-based agreements, Chris, I think you mentioned that these were expected to come online at the time of launch. Can you give us kind of a rough idea of how many lives are covered through those agreement or at least expect to be covered at the time of launch, and is this a process, which will be gradual throughout the years of the launch in the lifecycle of the product or is it something that is looking to be nailed down as it is possible.

Barry Greene — Chief Executive Officer

Yes, that’s a great question. Chris, why don’t you take that and then I’ll come back at the end.

Chris Benecchi — Chief Business Officer

Yeah, what I would say, Tim, is it’s early to talk about specific numbers. We’re active and engaged with a number of payers right now around proactive value-based agreements what contracts we would look like. I think as you take a step-back and think about you have to think about it temporarily. There are some payers who I think in and around the time and approval of zuranolone will be active and engaged around the conversation. I think there are other payer types who may take a little bit of a longer approach, in particularly, you think about some of the payer types in and around Medicare may take a little bit longer to take a step back and review the product. We’re actively engaged with all of those payers right now and engaged to make sure that as quickly as possible is those pairs are ready to agree to value based agreements and contracts specifically, but we’re going to have the product available in that peri-launch window as rapidly as possible.

Barry Greene — Chief Executive Officer

Yeah, great answer, Chris. And just to provide some further context, what I’ve seen in the past being involved in value-based agreements is a number of payers who are the more innovative payers get involved earlier, and other payers see press releases or other payers talk about it, they will call and say, hey, we need to get involved. Now, the interesting piece here is that everybody you talk to is highly focused on mental health. So, we have that as an advent. Nobody you want to talk to thinks that depression is solved and everybody understand that at the end of the day, employers are the customer’s payers and all employers wants the people at work all the time, not absenteeism often from depression.

Tim Lugo — William Blair — Analyst

Understood. Thank you.

Operator

We’ll go next to Marc Goodman with SVB Securities.

Marc Goodman — SVB Securities — Analyst

Yeah, good morning. On the milestone slide for SAGE-324, it talks about additional data that you’re going to be showing this year for ET. Can you talk about what that data is. And just secondly how you considering potentially studying that in tremor in Parkinson’s disease. We have heard from doctors that that actually could be another population, maybe even easier population to demonstrate efficacy. Thanks.

Barry Greene — Chief Executive Officer

Thanks, Marc. Do you want take that?

Chris Benecchi — Chief Business Officer

Yes, absolutely. So, thanks for question, Marc. We continue to do analysis on the data that we have from the KINETIC study. Remember as well that part of the reason we’ve moved into this place is that we’ve done early pilot studies initially with ZULRESSO, and then with zuranolone really to identify whether or not this patient population would benefit. So, we’ve got quite a lot of data all throughout the program so far around the benefits of this mechanism in the treatment of essential tremor. And so those are the data that we’re talking about, and you’ll see that data continue to emerge as [Indecipherable].

Operator

That will conclude the Q&A portion of today’s call. With that, I will turn it back over to Mr. Greene for closing remarks.

Barry Greene — Chief Executive Officer

Thanks, Jennifer, and thanks again everyone for joining us this morning to review our results from the first quarter of 2023. Our progress during the first-quarter of 2023 is the result of the teamwork and dedication of everyone at Sage and our collaborators. As we progress our pipeline development activities, we believe we’re well positioned to deliver on our mission to develop and launch life-changing brain health medicine, so every person can thrive. Thanks again everyone, have a great day. Bye.

Operator

[Operator Closing Remarks]

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Q1 2023

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