Q3 2020 SAGE Therapeutics Inc Earnings Call

Operator: The third quarter 2020 Results Conference Call will begin momentarily. Once again, ladies and gentlemen, thank you for your patience and please stand by. Good morning. Welcome to SAGE Therapeutics' third quarter 2020 financial results conference call. Currently, all participants are in a listen only mode.

Therapeutics third quarter 2020 results conference call will begin momentarily once again, ladies and gentlemen, thank you for your patience and please standby.

[music].

Good morning, welcome to Sage Therapeutics third quarter 2020 financial results Conference call. Currently all participants are in a listen only mode. The call is being webcast live on the Investor and media section of sages website at Sage our X. Dot Com. This call is property of Sage Therapeutics and recordings.

Operator: The call is being webcast live on the investor 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.

Action or transmission of this call without the expressed written consent of fate Sage therapeutics is strictly prohibited.

Please note that this call is being recorded I would now like introduced Jeff Boyle head of Investor Relations at Sage.

Jeff Boyle: I would now like to introduce Jeff Boyle, Head of Investor Relations at SAGE. Good morning, everyone, and thank you for joining SAGE Therapeutics' 3rd Quarter 2020 Financial Results Conference Call. Before we begin, I encourage everyone to go to the Investor and Media section of our website, www.sagerex.com, where you can find the press release related to today's call, as well as the slides that contain supplemental details. I would like to point out that we will be making forward-looking statements that are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ materially.

Good morning, everyone and thank you for joining Sage Therapeutics third quarter 2020 financial results conference call before we begin I encourage everyone to go to the industry.

Media section of our website at say direct Dot Com, where you can find the press release related to today's call as well as the slides that contains supplemental details.

I'd 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 consult the risk factors discussed in today's press release and in our FCC filing for additional details.

Jeff Boyle: Please consult the risk factors discussed in today's press release and in our SEC filings for additional details. We will begin the call with prepared remarks by Mike Clunan, our Chief Operating Officer, Jim Doherty, our Chief Research Officer, and Kimi Iguchi, our Chief Financial Officer. We will then be joined for the Q&A session of the call by Dr. Steve Kaines, our Chief Medical Officer. Dr. Jeff Jonas, our Chief Executive Officer, is recuperating at home from a surgical procedure and looks forward to connecting with many of you at upcoming investor conferences.

We will begin the call with prepared remarks by Mike Cronin, Our Chief operating Officer, Jim Doherty, Our Chief Research Officer, and Kimi Iguchi, our Chief Financial Officer.

Be joined for the Q and a session of the call by Dr., Steve King Our Chief Medical Officer.

Dr., Jeff Jonas our Chief Executive Officer is recuperating at home from a surgical procedure and look forward to connecting with many of you went up coming investor conferences.

Mike Clunan: And with that, I'll now turn the call over to Mike. Thanks, Jeff, and thank you, everyone, for joining us this morning. We're pleased to update you on the progress across each of our development programs. But before I review results from the quarter, I want to let you know that Jeff is at home recuperating as expected from his scheduled surgical procedure and continues to make good progress in his recovery. We anticipate he will return full time sometime in December, and our thoughts are with Jeff as he continues to recover.

And with that I'll now turn the call over to Mike.

Thanks, Jeff and thank you everyone for joining us this morning.

Pleased to update you on the progress across each of our development programs, but before I review results from the quarter I want to let you know it's yes is at home recuperating as expected and is scheduled surgical procedure and continues to make good progress in its recovery.

Anticipate he will return to full time sometime in December and our thoughts are with Jeff as he continues to recover.

Mike Clunan: Today, I'll provide an overview of our third quarter activity and discuss progress across our depression, neuropsychiatry, and neurology franchise. I'll then turn the call over to Jim Doherty to provide an R&D and clinical update, and finally, Kimi Iguchi will provide a review of our third quarter financial results... Eve Kaines will join us for the Q&A portion of the call. As we are now nearly 9 months into the global COVID-19 pandemic, we've come to learn how the virus has impacted not only those infected but all of us. Particularly concerning is the effect the quarantine and the pandemic have had on mental health. These past months have seen sharp increases in depression and risk factors for suicide.

Today, I'll provide an overview of our third quarter activity and discuss progress across our depression, neuro psychiatry and neurology franchise.

I'll, then turn the call over to Jim Doherty to provide an R&D and clinical update and finally can you. Good she will provide a review of our third quarter financials you.

He kings will join us for the Q any portion of the call.

As you are now nearly nine months into the global COVID-19 pandemic, we've come to learn how the virus has impacted not only those infected but all of us, particularly concerning if you. If that's the warranty and then if it had a mental health.

These past months have seen sharp increases in depression and risk factors for suicide now.

Mike Clunan: Now more than ever, our team is motivated to provide much-needed options for patients suffering from debilitating brain health disorders. To that end, I'm pleased to report today that execution of our clinical programs remains on track, with a series of key milestones anticipated over the next 12 to 18 months. Our team of dedicated professionals has done a great job of driving this execution that we expect will set up a number of significant potential catalysts in the coming months. As you know, SAGE has a deep and robust clinical pipeline that spans across multiple disciplines with programs in early, mid, and late stage development. In September, we were pleased to host our annual FutureCast events, which gave a broad overview of each of our programs.

Now more than ever our team is motivated to provide much needed options to patients suffering from debilitating brain health disorders.

To that end I'm pleased to report today and execution of our clinical programs remains on track with a series of key milestones anticipated over the next 12 to 18 months our team of dedicated professionals has done a great job of driving this execution that we expect will set up a number of significant potential.

Atlas in the coming months.

As you know Sage has a deep and robust clinical pipeline that spans across multiple disciplines with programs in early mid and late stage development.

In September we were pleased to host our annual feature cast of that which gave a broad overview of each of our programs future Cas demonstrated that we follow the science with what we believe is a fundamentally different approach one that aims to de risk the drug development process and we lean into the learnings from this process.

Mike Clunan: FutureCasts demonstrated that we follow the science with what we believe is a fundamentally different approach, one that aims to de-risk the drug development process, and we lean into the learnings from this process in a focused and creative way. In the nine years since our founding, we have generated very compelling data that support our methods. We believe the updates we provided at FutureCasts, including clinical and physician perspectives, support our methodology. If you are unable to tune in, I encourage you to listen to the archive, which is available on our website in the Investor Relations section.

Focused and creative way.

In the nine years since our founding we have generated very compelling data that support our methods. We believe the update we provided at future cast, including clinical and patient perspectives support our methodology.

If you were unable to tune I encourage you to listen to the archive, which is available on our website in the Investor Relations section.

Mike Clunan: Most recently, we announced positive interim data from our Open Label Shoreline Study in Major Depressive Disorder, or MDD, with Xeranlone. Jim will provide additional color about these data, but I want to take a minute to talk about what they mean to our depression program, patients, and for SAGE as a company. We believe the Shoreline data support the idea that depression is a medical condition that can be treated as needed.

Most recently, we announced positive interim data from our open label shoreline study in major depressive disorder or MDD was around loan Jim will provide additional color about these data I want to take a minute to talk about what they need to our depression program patients and for siege as a company.

We believe the shoreline data supports the idea that depression has a medical condition that can be treated as needed. We look forward to the results of our ongoing and planned C programs, which we hope will provide further support.

Mike Clunan: We look forward to the results of our ongoing and planned Phase 3 programs, which we hope will provide further support. It would truly be a breakthrough if seranolone is successfully developed and approved for use as needed in treating MDD, representing a different approach to how depression can be thought about and treated going forward. And for patients, this approach could be potentially game-changing. Our mission at SAGE, as you've heard us say many times before, is to create and develop medicines that matter so people can get better sooner. We are working to bring new options to a spectrum of disease states where the unmet medical need is high, and in many cases, innovation is lacking, and not just incremental changes. We have what we believe is one of the strongest pipelines in the brain health space with numerous novel chemical entities across multiple franchises. Our work to disrupt the treatment model for depression is only the beginning for SAGE.

It would truly be a breakthrough if saran rona successfully developed and approved for use as needed in treating MDD, representing a different approach to how the crushing can be thought about and treated going forward and for patients. This approach would be potentially game changing.

Our mission at sea as you've heard US say many times before is to create and develop medicines that matter. So people can get better sooner, we're working to bring new options to a spectrum of disease States, where the unmet medical need is high and in many cases innovation is lacking and not just incremental changes we.

Now that we believe is one of the strongest pipelines in the brain health space with numerous novel chemical entities across multiple franchises our work to disrupt the treatment modeling depression is only the beginning for stage. We are excited as we plan for the continued progression of all three of our franchises depression neurology.

Mike Clunan: We are excited as we plan for the continued progression of all three of our franchises, depression, neurology, and neuropsychiatry, over the near, mid, and long term. Now, I'll turn it over to Jim to walk you through the clinical updates.

And Eurosite hatchery over the near mid and long term and now I'll turn it over to Jim to walk you through the clinical updates Jim.

Jim Doherty: Thanks, Mike, and good morning, everyone. This morning, I'll provide an update on our R&D and clinical efforts across our portfolio. Let me begin with an overview of our lead clinical asset, Zoranolone, which is currently being studied for the treatment of MDD and postpartum depression, or PPD. Our Zoranolone program is successful, and is designed to achieve a first NDA filing as efficiently as possible. We've initiated three new phase three studies. Each, if we have positive outcomes, would provide efficacy data to potentially support a unique filing pathway. In October, we reported positive interim topline results from a July data cut of the ongoing Phase 3 Open Label Shoreline Study. We were very pleased with these initial data, not only for the safety profile seen in the study to date but also for the potential for an as-needed treatment for patients diagnosed with MDD. As a reminder, this clinical study was designed to follow patients with MDD and evaluate the safety, tolerability, and need for repeat dosing of 30 mg of xeronalone in patients for up to one year.

Thanks, Mike and good morning, everyone. This morning, I'll provide an update on our R&D and clinical efforts across our portfolio. Let me begin with an overview our lead clinical assets around alone, which is currently being studied for the treatment of MDD and postpartum depression or PPD.

Was around one program. If successful is designed to achieve a first NDA filing as efficiently as possible. We've initiated three new phase three studies. Each if we have positive outcomes would provide efficacy data to potentially support a unique filing pathway.

Jim Doherty: In May of 2020, the protocol was amended to allow enrolled patients to receive re-treatment with ziradolone at 50 mg. We also began enrolling a new cohort of patients with MDD to receive de novo Zaranolone at 50 milligrams. The primary endpoint of the study was safety and tolerability. The data analyzed to date show that zaranolone was generally well tolerated at the 30 milligram dose, as well as among the initial patients treated with the 50 milligram dose.

Jim Doherty: Adverse events reported during the period analyzed were generally consistent with results seen in previous Sorano alone clinical trials. This is a data-rich trial, and I'd advise you to review the details in our October 15 press release. There are, however, a couple of key points from Shoreline that I want to reiterate during this call. Number one, 72% of patients who only received 30 milligrams of Ritalin in the study achieved a response, meaning a reduction in their HAM-D score of at least 50%, and 40% achieved remission, meaning a HAM-D score of less than seven after the two-week initial treatment cycle.

Jim Doherty: Number two, 75% of patients treated with de novo 50 milligrams achieved a response, and 48% achieved remission by the end of the initial treatment cycle. Remember, this is early data with a small number of subjects, but we are encouraged by the data seen with the 50 milligram dose. And number three, nearly one-half of the patients who had a positive response to the initial 14-day treatment with ziranylone at 30 milligrams did not need additional treatment during the study period based on the study criteria, and approximately 70% used two or fewer treatment courses, a total of two or four weeks of treatment with ziranylone at 30 milligrams, which we believe will be the minimally effective dose if our development efforts are

Okay for the follow up period.

This supports our theory that depression can be treated as needed.

From a safety and Tolerability perspective adverse events reported in this interim data cut where generally consistent with the known safety profile and no new safety signals were identified the most common adverse events at 30 milligrams per somnolence headache and dizziness.

Jim Doherty: As you may recall, the need for repeat dosing was assessed every 14 days based on specified measures, and a maximum of five treatments was permitted during the follow-up period. This supports our theory that depression can be treated as needed. From a safety and tolerability perspective, adverse events reported in this interim data cut were generally consistent with the known safety profile, and no new safety signals were identified. The most common adverse events at 30 milligrams were somnolence, headache, and dizziness.

And at the 50 milligram dose the adverse event profile of similar to that seen in patients who received 30 milligrams as our analysts.

But then so some loans dizziness, sedation headache, and tremor were observed to be more frequent in the 50 milligram cohort, while we're generally similar in severity to the events seen it 30 milligrams.

Most adverse events across both the 30 and 50 milligram groups were mild to moderate.

These interim results from shoreline give us further confidence in the potential is around alone. We plan to report comprehensive data from the 30 milligram dose in the first half of next year, which will include additional analyses of the day to set.

Jim Doherty: And at the 50 milligram dose, the adverse event profile was similar to that seen in patients who received 30 milligrams of Zoranova. Events of soundness, dizziness, sedation, headache, and tremor were observed to be more frequent in the 50-milligram cohort, but were generally similar in severity to the events seen at 30 milligrams. Most adverse events across both the 30 and 50 milligram groups were mild to moderate. These interim results from Shoreline give us further confidence in the potential of ziranylin.

Additionally, we expect to report topline results from the 50 milligram cohort later in 2021.

Moving now to our other clinical trials for is around alone earlier. This year, we initiated R. As three waterfall study investigating is around alone or as needed or episodic treatment of mbd.

Jim Doherty: We plan to report comprehensive data from the 30-mg dose in the first half of next year, which will include additional analyses of the dataset. Additionally, we expect to report top-line results from the 50 milligram cohort later in 2021. Moving now to our other clinical trials for Zoranolone, earlier this year, we initiated our Phase 3 Waterfall Study investigating Zoranolone for as-needed or episodic treatment of MDD. This placebo-controlled trial is evaluating a two-week course of zaranolone 50 mg in patients with MDD.

Jim Doherty: Based on our enrollment projections, we expect to report top-line data from the Waterfall Study in the first half of 2021. We also continue to dose patients in our Phase 3 Skylar study, investigating zaranolone as an oral therapy for women with PPD. This placebo-controlled trial is evaluating a two-week course of zaranolone 50 mg, and top-line data is anticipated in 2021. Additionally, our Phase III choral study will investigate xeronalone as an acute rapid response therapy in patients with MDD when co-initiated with a newly administered standard antidepressant therapy, or ADT. To be clear, this means patients starting a new ADT regardless of past treatment history, not just those who are trying an ADT for the first time. This placebo-controlled trial will evaluate a two-week course of geronolone 50 mg when co-initiated with an open-label ADT in patients with MDD.

He's pathways, we believes around alone as a potential first in class therapy for depression could offer a clinically differentiated treatment approach. This is reflective of our overall strategy and would serve as a potentially significant step forward and delivering paradigm shifting approaches for patients.

Turning now to our neurology franchise enrollment continues into kinetic study or phase two double blind trial with stage 324, and essential tremor as a reminder, essential tremor is the most common movement disorder in the U S affecting an estimated 6 million people in our country and there have been no new medicines for this or this.

Order in more than 50 years in fact, the only FDA approved pharmacological treatment for essential tremor Propranolol was approved in 1967.

Earlier open label data with stage three to four demonstrated it at his compound with pharmacological characteristics. We believe are well suited for development opportunities not only in the central tremor, but also in epilepsy and Parkinson's disease, we anticipate reporting topline data from this trial in the first quarter of 2021.

Jim Doherty: We expect to begin dosing this study by the end of the year, with anticipated top-line data in 2021. With Waterfall, Skylark, and Coral, we enter 2021 with a robust program intended to generate efficacy data to support three pathways to a potential NDA filing for Xuranalytics. If successful on these pathways, we believe Xeronalone, as a potential first-in-class therapy for depression, could offer a clinically differentiated treatment approach.

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And the third quarter, we initiated our phase two a paradigm study and open label study Osage 718, the lead asset in our neuropsychiatric franchise.

And our most advanced NMDA Pam in patients with Parkinson's disease cognitive dysfunction.

Jim Doherty: This is reflective of our overall strategy and would serve as a potentially significant step forward in delivering paradigm-shifting approaches for patients. Turning now to our neurology franchise, enrollment continues in the Kinetic Study, our phase two double-blind trial with SAGE 324 in essential tremor. As a reminder, essential tremor is the most common movement disorder in the U.S., affecting an estimated six million people in our country, and there have been no new medicines for this disorder in more than 50 years. In fact, the only FDA-approved pharmacological treatment for essential tremor, propranolol, was approved in 1967.

Jim Doherty: Earlier open-label data with SAGE 324 demonstrated that it is a compound with pharmacological characteristics we believe are well suited for development opportunities, not only in essential tremor but also in epilepsy and Parkinson's disease. We anticipate reporting top-line data from this trial in the first quarter of 2021. In the third quarter, we initiated our Phase 2A Paradigm Study, an open-label study of SAGE 718, the lead asset in our neuropsychiatric franchise and our most advanced NMDA PAM in patients with Parkinson's disease cognitive dysfunction. In Phase I studies, SAGE 718 was well-tolerated with no serious adverse events, and most treatment-emerging adverse events were mild. In the Phase I program, we also conducted certain assessments of executive function in a small cohort of patients with early Huntington's disease and in a cohort of healthy volunteers.

John its way this has been a year with many challenges for all of us.

The challenge comes opportunity and Sage has seize those opportunities throughout the year.

Jim Doherty: In these studies, we saw improved performance compared to baseline on tests of working memory and complex problem solving. We believe the data generated in our Phase 1 program support our hypothesis that SAGE 718 may be relevant for the treatment of multiple disorders with impaired cognitive function, including Huntington's, Alzheimer's, and Parkinson's disease. We expect to begin dosing in a new Phase 2a open-label study of SAGE 718 in patients with Alzheimer's mild cognitive impairment and mild dementia, the Luminary Study, by the end of 2020. Results from these studies will inform the potential advancement of SAGE 718 in various disorders associated with cognitive dysfunction.

And development expenses were 74.1 million in the third quarter compared to 102.1 million for the same period of 2019.

Jim Doherty: Before I turn the call over to Kimi, I'd like to take this opportunity to thank the entire SAGE team for their continued dedication throughout these challenging times. As Mike mentioned earlier, patients suffering with brain health issues need better, more effective therapies now more than ever, and we are working tirelessly to deliver on our promise of bringing such treatments to patients so that they can get better soon. And with that, I'll now turn over the call to Kimi for a review of the financials. Kimi?

The decrease in our the expense.

Primarily related to the completion of the mountain study phase three clinical trials around alone in M. D D.

A decrease in non-cash dark based compensation expense.

And decrease spending for clinical pharmacology studies, partially offset by an increase in spending for the waterfall stay a phase three clinical study is around alone in M. D D.

Finally, we reported a net loss of 105.7 million for the third quarter of 2020 compared to 180 million for the same period 2019.

We ended the quarter was $671 million in cash cash equivalents restricted cash and marketable security.

Kimi E. Iguchi: Thanks, Jim. As I look towards the balance of 2020, this has been a year with many challenges for all of us. But with challenge comes opportunity, and SAGE has seized those opportunities throughout the year. We've advanced multiple clinical programs while maintaining a strong balance sheet, which we expect will support operations into 2022, allowing us to continue progressing a meaningful pipeline with many potential catalysts and milestones anticipated in the coming years. As you know, we take a portfolio approach to resource allocation. We've invested in multiple programs across several indications, and as a result, expect to achieve potential value-creating milestones in the coming 12 to 18 months. Now let me turn to the highlights of our third quarter 2020 financial results. Revenues were $1.6 million in the third quarter from sales of Zaretto compared to $1.5 million for the same period in 2019.

Kimi E. Iguchi: As we stated last quarter, so Restful revenues have been significantly affected by COVID-19 in the U.S., and we expect the significant adverse impact of the pandemic on Zoresto revenues to continue. As noted last quarter, we also expect future revenue growth to be limited even after the pandemic as a result of the continued significant barriers to treatment and the refocus of our commercialization efforts after the April 2020 restructuring. Selling general and administrative expenses were $35.1 million in the third quarter, compared to $88.5 million for the same period last year.

And on mute once your question has been stated.

Our first question comes from the line of Cory Kasimov with JP Morgan. Your line is open. Please go ahead.

Hey, good morning, everyone. This is turner on for Corey I, just want to speak on behalf. The team that we really hope Jeff is recovering well so maybe with Sage seven eight now the data is in 121 can you just help us set the stage here and with a meaningful change on the CSS Rs scale at 14 days just given its an open label study.

And is there anything you can glean from the data that would give you more confidence with Alzheimer's or huntingtons. Thanks.

Kimi E. Iguchi: Our reduction in commercial support for Xeresso as a result of our April 2020 restructuring was the primary driver of the decrease in SG&A in the third quarter. Research and development expenses were $74.1 million in the third quarter, compared to $102.1 million for the same period of 2019. The decrease in R&D expense is primarily related to the completion of the Mountain Study, a Phase III clinical trial of xeranilone and MDD. A decrease in Non-Cash Stock-Based Compensation Expense and decreased spending for clinical pharmacology studies, partially offset by an increase in the spending for the Waterfall Study, a phase three clinical study of zaranolone and MDD. Finally, we reported a net loss of $105.7 million for the third quarter of 2020 compared to $180 million for the same period of 2019. We ended the quarter with $671 million in cash, cash equivalents, restricted cash, and marketable securities.

Kimi E. Iguchi: We anticipate ending the year with approximately $550 million in cash, which we believe will provide runway into 2022. Last quarter, I said the second half of 2020 would be highlighted by proof points. The third quarter was certainly a great start, and with many catalysts and the recent announcement of the Shoreline data, I'm very encouraged by the possibilities ahead. We've streamlined operations to execute efficiently, continue to invest strategically across all three franchises, and maintained a strong balance sheet from which to support our mission of making medicines that matter so people with brain health disorders can get better sooner. Lastly, I want to emphasize how pleased I am with the resilience of the SAGE team in these challenging times. I'll now turn it back over to Mike for closing comments. Thanks, Kimi, and thanks, everyone, for joining us this morning.

To have a robust response, and so that really take them to the ongoing studies currently in Parkinson's disease Uhm, but also we are about to initiate the study in all timer's disease in both cases, the same strategy, they're they're open label studies intended to see if we see the same kinds of cognate improvements that.

We have seen in the Huntington and healthy volunteer study all those data together will allow us to decide what the strategy is moving forward with save 718, and the entire NMDA Pam platform.

Great. Thanks.

Thank you and our next question Cashing online S. Holven rector with Goldman Sachs. Your line is often please go ahead.

Good morning, and two questions for me one Uhm can you just walk through.

Mike Clunan: As you just heard, we're pleased with our execution, and we're on track with all of our clinical programs across the three franchises. We're excited about the potential for significant milestones over the next 12 to 18 months, and we believe we're well-positioned to continue advancing our multi-franchise strategy. At this point, I think we're ready to open it up to Q&A, so I'll turn it over to the operator. Thank you. Ladies and gentlemen, if you have a question at this time, please press star and then one on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key.

Operator: To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from the line of Corey Kazimov with T.P. Morgan.

Operator: Your line is open. Please go ahead. Hey, good morning, everyone. This is Turnaround for Corey.

Jim Doherty: I just want to speak on behalf of the team and say we really hope Jeff is recovering well. So maybe with SAGE 718, now that the data is in 1Q21, can you just help us set the stage here? And what's a meaningful change on the CSSRS scale at 14 days, just given it's an open-label study? And is there anything you can glean from the data that would give you more confidence with Alzheimer's or Huntington's? Thanks. Good morning. This is Jim.

Jim Doherty: Happy to take the question. Yeah, so SAGE 718 is our lead asset in the NMDA platform and, really, as a positive allosteric modulator for NMDA, an opportunity to really deliver on a novel approach to treating neuropsychiatric disorders. Huntington's patients, where we know from research in this space that in the early manifest space of Huntington's disease, their performance was a little bit down relative to healthy volunteers. But what we saw was an improvement in their performance on these same executive function tasks.

Alright next question, which is Rick two barrel with Cowan. Your line is open. Please go ahead.

Hi, Thank you for taking the question. This is my laundry to just really quickly as you continue to progress with the 50 milligrams does cohort and the shoreline trial can you maybe speak to some of the trends you've seen in patients that have had to go down to the 40 make those and are you seeing any of this and the waterfalls Betty Thank you.

Jim Doherty: So really, we see that as very much consistent with this neurobiology around MDA receptor function and certainly potentially very exciting as treatment modalities for improving cognitive function. But since it is early days in this space, we're trying to understand what patient populations are the likeliest to have a robust response. And so that really takes us to the ongoing studies currently in Parkinson's disease, but we are also about to initiate a study in Alzheimer's disease. In both cases, the same strategy.

Sure. This is Jim that'd be the basic question, Yeah, as we talked about.

To see the the milligram date of from the shoreline study and I think the way we look at it is two fold. So as I mentioned in the Tolerability profile is quite similar between 30 and 50 milligrams again very much consistent with the Tolerability profile that we've seen whereas around alone so far I do think.

Does speak to pharmacology in the sense that what as predicted what we see is the adverse events rates are a little bit higher than the mild moderate places severity in the places we've seen them. So what we continue to see our tradition related events, but again I think very much consistent with the modeling that we've done.

Jim Doherty: There are open-label studies intended to see if we see the same kinds of cognitive improvements that we have seen in the Huntington's and healthy volunteer studies. All of those data together will allow us to decide what the strategy is moving forward with SAGE 718 and the entire NMDA PAM platform.

Obviously around all the data we have from the study as well as from the understanding of the pharmacology is around one when it comes to a waterfall of course waterfall studies blinded and so we're really not much to talk about from waterfall data at this point.

Jim Doherty: Thank you. And our next question comes from the line of Salveen Richter with Goldman Sachs. Your line is open. Please go ahead. Good morning.

Gotcha, Okay. Thank you very helpful.

Thank you and our next question comes from the line of my goodness with STP Marianne Carolina is often please go ahead.

Jim Doherty: Two questions for me. One is, can you just walk through how you're thinking about the potential to restart Redwood with regard to FDA discussions and the scenarios to maybe get rid of the need for that? And then secondly, and I apologize if you've already discussed this, but for the essential tremor program, are you really looking for that 50% reduction level to be clinically meaningful and move forward? And maybe you could help us understand, you know, among the various endpoints that you could use, how you're thinking about selection on the forward here. Hi Salveen, sure, this is Jim. I'm happy to take the questions.

Sorry about that I started talking I'm not sure what happened, but a few questions can you can you just talk a little bit about r&d's spending for next year, just give us a sense of how we should be thinking about it relative to this year second question is on the essential tremor product and and and how the product.

It's different from 217, and whether you are seeing any.

Of the same type of sedation that you see what's 217, which which is minimal but I'm. Just wondering if it's if it's the same type of sedation and in the early work that you've done and then just lastly, nine O. Four we keep seeing it up there I was just curious when that's moving into the clinic.

Jim Doherty: So on the zaranulone side of things and Redwood, as we talked about, of course we have multiple parallel pathways forward and in this case we're talking about the episodic pathway where the shoreline data are certainly informing our understanding but we also are in the midst of the, Studies for across a couple of waterfall and as you're asking redwood and so the situation is we as we've always said we anticipate that redwood results will be needed for filing in the episodic pathway we're certainly looking forward to sharing the data with regulatory agencies from Shoreline and you know we'll we'll have a look at what that means for the landscape program and we'll continue to move forward. For the 3 to 4 study in essential tremor really this study is the kinetic study is as you mentioned a placebo controlled study really looking to see can we replicate the types of responses that we've seen in our early open label studies and we believe from both looking at similar kinds of study designs in the literature as well as you know available data somewhere in that 30 to 50 percent reduction of tremor amplitude is probably clinically meaningful and so you know although it's early days that's generally the kind of range of activity that we think would be a meaningful effect so you know beyond that we will have a look at the data as we complete the study and move forward from there. Great, thank you.

Okay well. This is kimmy why don't I start with the question on our D spending and I you know just Wanna start by saying that we really been managing our cash burn, making it at a big emphasis streamlining operations and hopefully he saw that in this corner. When you look at R&D. So you don't think about where it's going from here.

You know we've had several studies that have just begun we have the 324 study. This age 718 study and we will have multiple ongoing studies with the railroad three C. Three studies in 2021, So you will see a gradual rant and they already spent over the next step.

Quarters into 2021.

Yeah, Martha maybe I'm I'm I'm happy to take your questions around three to four and.

For it and I think the question around three to four differentiation from 217, yeah. Both of them compounds those molecules are Gaba patterns and so my design similar pharmacologist between two what we're doing is you can take advantage of the internal stage engine to allow us to craft related profiles and and so.

The the differences in profile three to four are around pharmacokinetics, it's been optimized for chronic dosing and it's PK profile is consistent with that when it comes to sedation. So sedation related adverse events are related to the primary pharmacology and so that is all.

Operator: Thank you. And our next question comes from the line of Marc Goodman with SVB Learing. Your line is open. Please go ahead. Mr. Goodman, your phone might be on mute.

So feature 46324, the compound was designed to have a wider window between the onset of activity and the onset of sedation related I E and so that's one of the things that we're looking at in the clinical studies to see if that preclinical margin bears out.

Operator: All right, we'll move to our next question, which is Ritu Baral with Cowen. Your line is open. Please go ahead. Hi guys, thank you for taking the question. This is Lila Ansari too.

But I think that's what we will look to see I would expect that the the sedation related profile is if.

Operator: Just really quickly, as you continue to progress with the 50 milligram dose cohort in the Shoreline trial, can you maybe speak to some of the trends you've seen in patients that have had to dose down to the 40 mg dose, and are you seeing any of this in the water? Sure. This is Jim.

If anything as mild or moderate then with 207, but we'll have to see what the data will tell us when it comes to nine O. Four so nine O. Four is an M. D. A pam so it's very much in the same family is C. 718, I was talking about a few minutes ago, we see a lot of opportunity in this space for NMDA part.

Jim Doherty: I'm happy to take the question. Yeah, as we talked about, we are pleased to see the 50-milligram data from the Shoreline study, and I think the way we look at it is twofold. As I mentioned, the tolerability profile is quite similar between 30 and 50 milligrams, again, very much consistent with the tolerability profile that we've seen for Ritalin so far.

Does it have allosteric modulators and so none of four continues to move through clinical development. It's currently in phase one in the singular sending those days and.

Maybe just to add to that market. The question for nine O four which really does that to some of the things in Los Angeles in one eight we have multiple studies going on 718, and we're taking a portfolio approach we have a deep red in depth compound to choose from them right in our pipeline, but it seems that we're trying to be really disciplined and focused in our efforts to make sure we're pushing the molecule.

Jim Doherty: I do think that does speak to pharmacology in the sense that, as predicted, what we see is the adverse event rates are a little bit higher in the mild-moderate severity in the places we've seen them, so what we continue to see are sedation-related events. But again, I think very much consistent with the modeling that we've done previously around all the data we have from the study, as well as from our understanding of the pharmacology of Ritalin. When it comes to waterfalls, of course, you know, the waterfall study is blinded, and so really not much to talk about from the waterfall data at this point. Okay, thank you. It was very helpful.

Through the process that he can drive the most value for patients and prestige and so we will continue to take that portfolio approach will see the data file the science and then we'll make the right strategic decisions to align for a resource allocation strategy.

X.

Thank you and our next question comes from the online and and your Tyler Jeffries Here mine is open. Please go ahead.

Kimi E. Iguchi: Thank you. And our next question comes from the line of Marc Goodman with SVB Larynx. Your line is open. Please go ahead. Sorry about that. I started talking. I'm not sure what happened.

Kimi E. Iguchi: But a few questions. Kimi, can you just talk a little bit about R&D spending for next year and how we should be thinking about it. Second question is on... and how the product is different from two seven and whether you are. I'm just wondering if it's the same type of... And then just lastly, 904, we keep seeing it up there. I was just curious. Okay, well this is Kimi.

Kimi E. Iguchi: Why don't I start with the question on R&D spending? And I, you know, just want to start by saying that we've really been managing our cash burn, making it a big emphasis, streamlining operations, and hopefully, you saw that in this quarter. When you look at R&D spend and think about where it's going from here, you know, we have several studies that have just begun. We have the 324 study, the SAGE 718 study, and we'll have multiple ongoing studies with Zoranilone, so three phase three studies in 2021. So you will see a gradual ramp in the R&D spend over the next several quarters into 2021. Yeah, Marc, this is Jim.

So some patients who are being treated more frequently and so that not unexpectedly there. Some diversity in response and Thats something you see across depression patients part of what we're doing with the shoreline dataset is really digging into understanding.

What differences there are and I think that's something that we're in the midst of looking at right now.

Jim Doherty: I'm happy to take the questions around 3-2-4 and 9-0-4. And I think the question around 3-2-4 is about differentiation from 2-1-7. You know, both compounds, both molecules are GABA PAMs, and so by design, they have similar pharmacology between the two. What we're doing is we take advantage of the internal SAGE engine to allow us to craft related profiles. And so the differences in profile for 3-2-4 are around pharmacokinetics. It's been optimized for chronic dosing, and its PK profile is consistent with that. When it comes to sedation, so sedation-related adverse events are related to the primary pharmacology, and so that is also a feature of SAGE 3-2-4. The compound was designed to have a wider window between the onset of activity and the onset of sedation-related adverse events. And so that's one of the things that we're looking at in the clinical studies to see if that preclinical margin bears out. But I think that's what we'll look to see. I would expect that the sedation-related profile is, if anything, as mild or milder than with 2-1-7. But we'll have to see.

On the mental data and actually will show the way on how medicine like this would be used if approved so again. This is this is how we think about the program and that's how we use the data that we've created to support our next steps.

To your question around the waterfalls study.

The purpose in the increasing the sample size there was really to to ensure sufficient power for all of the subgroup analyses.

Jim Doherty: That's what the data will tell us. When it comes to 9-0-4, so 9-0--4 is an NMDA PAM, so it's very much in the same family as SAGE 7-1-8, which I was talking about a few minutes ago.

Jim Doherty: We see a lot of opportunity in this space for NMDA-positive allosteric modulators, and so 9-0-4 continues to move through clinical development. It's currently in Phase 1 in the single-offending dose phase. And maybe just to add to that, Marc, the question for 904, which really goes back to some of the things you were saying about 718, we have multiple studies going on in 718, and we're really taking a portfolio approach. We have a deep breadth and depth of compounds to choose from, right, in our pipeline, but as Kimi said, we're trying to be really disciplined and focused in our efforts to make sure we're pushing And so we'll continue to take that portfolio approach. We'll see the data, we'll follow the science, and then we'll make the right strategic decisions to align with our resource allocation strategies. Thank you. And our next question comes from the line of Andrew Tai with Jefferies. Your line is open.

Operator: Please go ahead. Thanks. Good morning, guys.

Operator: So, maybe two questions for me. The first one is on Shoreline, the results. I think, if I recall correctly, 45 percent of responders stayed better for a year. And, well, if that's the case, do you have any idea what kinds of patients those were? I'm just trying to reconcile this kind of valuable data point with how you would eventually run your Redwood study. And then my second question is about Waterfall. You recently increased the enrollment size. Can you help provide some color on why that is?

In the 10, Meg or more consistent response.

Sure, Yes, I think look good we.

What we see from shoreline overall as we think the data are both quite supportive of the overall program and really foundational for this purpose.

Jim Doherty: Thanks. This is Jim. Happy to take your questions. So, you know, the first question around, sorry, could you repeat the first part of the question? Yeah, so I guess 45 or 50% of patients didn't need retreatment in the first year. So I'm just wondering, how do you tie that with running Redwood, I guess?

Potential different way of treating anybody and I think beyond that when you look at the results we have to be a little careful overall up its comparing to other studies given the naturalistic design well what we see is a fair amount of consistency in that 30 milligram data when you look at both the overall.

Jim Doherty: Yeah, and I think the first thing to mention, of course, is the Shoreline data set, the very rich data set, gives us a tremendous amount of information. And as you say, the numbers are about a little under half of the patients were treated in the original 15-day dose and then weren't retreated again. And then there's an additional population of patients who required a single retreatment sometime within that one year's time frame.

Jim Doherty: And then there are also some patients who are being treated more frequently. And so, not unexpectedly, there's some diversity in response, and that's something you see across depression patients. Part of what we're doing with the Shoreline data set is really digging into, you know, understanding what differences there are.

Jim Doherty: And I think, you know, that's something that we're in the midst of looking at right now. And so, you know, how that relates to the Redwood study, of course, the Redwood study design is intended to, rather than retreat as needed based on symptoms, retreat based on time and time interval. And so, of course, as you mentioned, that adds complexity as we're learning from the Shoreline study that there is a persistent response in some fractions of people. So that's something we're certainly aware of and, you know, factoring into our discussions. And maybe I'll bounce it over to Steve to weigh in a little bit on the topic. Yeah, you're asking a fundamental question about how we would use the shoreline data, and as you say, the majority of patients didn't require more than one or two treatments over the course of a year, and that's really important.

Thank you.

Thank you and our next question comes from the line of Paul Matteis with Stifel. Your line is open. Please go ahead.

Hi, This is Katie on for Paul and we just had a quick follow up question from a question asked earlier I'm. The luminaries study on that you're planning on initiating we were wondering if you're planning on examining event related potentials, such as P. 300 latency or if you could provide any additional.

Color on endpoints that you're planning on using thanks.

Hi, David This is Jim happy to take your question Yeah. So of course those grounds of event related potentials are quite interesting. So that's again part of the neurobiology.

Steve Kaines: That's the fundamental question we were looking to ask ourselves, and we believe that's informative of how you would actually identify what an appropriate treatment regimen might be, even if you wanted to establish a fixed-dose retreatment. So what we said is what we're looking for is to have data from the waterfall as well as the shoreline data and use that to really take a look at what that fixed-dose scheme might be for shoreline. So we've always said we follow the data. We want to make sure that we do that as mindfully as possible to really provide the appropriate set of information that informs both regulators, physicians, and patients on how best to use the medicine. The other thing about shoreline is, you know, Jim spoke about this during the call. It is the largest naturalistic study ever conducted within a development program.

Steve Kaines: It's fundamental data and actually will show the way a medicine like this would be used if approved. So, again, this is how we think about the program, and it's how we use the data that we've created to plot our next steps. And to your question about the Waterfall Study, the purpose of increasing the sample size there was really to ensure sufficient power for all of the subgroup analyses that we were conducting in the Waterfall Study. It's not particularly shoreline study-related.

With the mechanism of of Gaba that actually 207 would reduce the potential her tremors and so I'm. Just curious if this is if this could be a drug drug interaction that could also potentially affect the coral study going forward.

Jim Doherty: But, you know, and I think it's the case, as Mike said earlier, nine months into this global pandemic, you're seeing sharp increases in depression and things like risk factors for suicide. And so there's a tremendous amount of need out there. Great. Thanks for all the color.

Thanks.

Yes, Hi, this is Steve let me, let me just comment on it you said it.

We have seen.

A tremor in a variety of trials, but the thing to keep in mind here is.

Benefit risk profile, so Jim said it during the call we're seeing tremor in.

Jim Doherty: I appreciate it. Thank you. And our next question comes from the line of Akash Tewari with Wolf Research. Your line is open.

Vast minority of the patient small numbers of patients and their mainly mild to moderate so the way to think about it as in terms of benefit risk in the way it impacts potential patient use.

Operator: Please go ahead. Hi, this is Leo Ma for Akash. Thanks for taking my question. My first question is about Zoranolam, and how do you think about the different responses to 13 mg and 15 mg, as you have seen so far? Did you see a strong dose response at 15 mg or a more consistent response? And my second question is about SAGE 324. We noticed your recent poster at AAN that all six patients those with 16 mg of SAGE 324 had mild to moderate TAE, while only two out of six patients those with 45 mg had TAE. So we wonder when these TAEs typically occur?

And it said very little impact you know the the 50 milligrams as data that's still in in process will be especially following it but it's nothing that's given us concerned and as you said. This is these numbers and what we've been seeing as well below what's typically seen in drugs that are used to treat patients with depression. So again.

Well, we'll be able to say more about it as as the study's finalizes.

But not something that's given us pause at this point.

Okay.

[laughter].

Cute and our next question comes from the line of Alright outlet like section Kennedy shall I myself think please go ahead.

Hey, Thanks for taking my question and setting are sending our best suggest I've got two questions. Here I guess first times ran alone I was just wondering if you could elaborate a little bit more on the clinical pharmacology safety data at this point, what additional clinical studies outside of landscape are going to be necessary for an NDA submission.

Jim Doherty: Do they correlate well with the serum drug concentration like we saw in the Zoranolam baseline data? Thank you. Absolutely. So there are several questions in there. So you got that. Let's take the three, two, four questions first.

Jim Doherty: You know, I think, look, the goal of the phase one studies is to give us some signs of activity. We do a lot of work around understanding PK-PD relationships. Of course, we're tracking adverse events in those studies, but I think one of the key aspects of a phase 2 study, a placebo-controlled study, is to really dig into an understanding and develop an understanding of adverse events and adverse event profiling. So, I think that's part of what we'll see with the readouts from the kinetic data. And your question around, I wonder, like, what type of different responses I've seen so far to 30 mg versus 50 mg? Do I see, like, a strong dose response at 50 mg or a more consistent response? Sure.

And then maybe one on 718 am I'm see there. There's this little Advisory Committee meeting Tomorrow for <unk> and I guess, you know in the backdrop of that I'm just wondering how the outcomes there might influence your development strategy for 718, and all timers, just I guess, perhaps most specifically on outcomes relating to executive function.

And memory, thanks very much.

Hello. This is Jim you'll have to take both questions. So the around alone question clinical pharmacology. So we we do have a sort of a standard package of clinical pharmacology studies that we are running through to support who's around alone filing. These are things like a drug drug interactions studies and things like that these are.

Jim Doherty: Yeah, you know, and I think, look, that we, what we see from Shoreline overall is that we think the data are both quite supportive of the overall program and really foundational for this potential different way of treating M&D. And I think beyond that, when you look at the results, we have to be a little careful overall about comparing to other studies given the naturalistic design. Well, what we see is a fair amount of consistency in the 30 milligram data when you look at both the overall response change in M&D, things like response rates and remission rates. So, we think it's quite consistent with what we're seeing across the rest of the studies in the program. When you look at then 30 milligrams to 50 milligrams, the other thing to recall is that we're still in relatively early days at 50 milligrams. This is a data cut that was taken in July.

No I think we see that as a.

Mike Clunan: So, we do have sufficient data at 50 milligrams with the data cut off to present the results, but I think just a caution there that it's still relatively early days at 50 milligrams. Having given you those caveats, we are encouraged by the results that we see where, from a response and remission point of view, you're seeing numerical increases in those numbers for the 50 milligram data. So, you know, I think what we're seeing so far is consistent with our expectations. But beyond that, I think we'll need to wait for the rest of the study data to come out. Jim, I just want to add one thing.

So it just very much a different approach and certainly the approach that were taking for symptomatic improvement of performance by enhancing and indeed receptor function is probably complimentary to approaches for disease modification I think.

The real point is that there is a tremendous amount of unmet medical need in a number of nerve to generate disorders, including Alzheimer's disease, but also certainly parkinson disease, Parkinson's disease, Frontotemporal dementia, huntingtons disease, and what we see with the NMD Pam approaches that there is opportunity to.

Mike Clunan: Just from a patient perspective, as Jim was saying, the results from Shoreline are compelling. We think it's validating this potential for treatment as needed. And if you think about some of the stats that Jim gave earlier, 70% of patients only needing one or two treatments, and what that really means. Patients on therapy for two weeks or four weeks over the course of the year, right? There's real potential here, and that's what we get excited about.

Jim Doherty: We'll continue to see some of the other data, as Jim said, come through. But if you step back and you think about what the Shoreline data really indicated for us, this is why we're starting to get excited about the potential here. Thank you. Thank you. And our next question comes from the line of Paul Matteis with Cecil. Your line is open. Please go ahead. Hi, this is Katie on for Paul.

Operator: We just had a quick follow-up question from a question asked earlier. On the luminary study that you're planning on initiating, we were wondering if you were planning on examining event-related potentials, such as P300 latency, or if you could provide any additional color on endpoints that you're planning on using. Hi, Katie. This is Jim.

Jim Doherty: Happy to take the question. Yeah, so, of course, those kinds of event-related potentials are quite interesting. So that's, again, part of the neurobiology of NMDA receptors, and there's some reason to think that some of those, especially P300, which has been shown to be at least associated with cognitive processing, could be an interesting place to look.

It comes from the line J O Olsen with Oppenheimer. Your line is open. Please go ahead.

Oh, Hey, guys. Thanks for taking my question I had a couple maybe start with a big picture question can you just talk about the potential advantages of the Gaza Ham versus an M. D. A antagonists for the treatment of N D D and and.

Jim Doherty: You know, I think that the luminary study is designed to give us data around cognitive processing. And so, you know, back to our mantra of we lead with human data, we're very much focused on those cognitive results. We have, of course, looked at event-related potentials in our experimental medicine studies, which we described last year. So I think that's certainly something that we always keep an eye on and we'll look at in the future whether some of those endpoints are value-adding. But in the luminary study, the focus is on cognitive performance, of course, as well. Okay, great.

And how do you see the differentiation of Saran alone versus.

Jim Doherty: Thank you, and our next question comes from the line of Brian Abrahams with RBC Capital Markets. Your line is open, please go ahead. Hi, it's Leo on for Brian.

Operator: Thanks for taking my question. I just wanted to follow up on Shoreline. I just wanted to know if you guys could provide some more color on the tremor A that you saw with the 50 milligram dose. And I was just curious what the rate of tremor was in Mountain.

Steve Kaines: And I guess we know that, you know, SSRIs can cause tremors. But one would think, with the mechanism of GABA, that actually 217 would reduce the potential for tremors. And so I'm just curious if this is, you know, if this could be a drug-drug interaction that could also potentially affect the coral study going forward. Thanks. Yeah, hi, this is Steve.

Steve Kaines: Let me just comment on that. You said it, you know, we've seen tremor in a variety of trials. But the thing to keep in mind here is the benefit-risk profile. So Jim said during the call, we're seeing tremor in a vast minority of patients, small numbers of patients, and they're mainly mild to moderate.

Sure I mean, I think the most.

Steve Kaines: So the way to think about it is in terms of benefit and risk and the way it impacts potential patient use. And it's had very little impact, you know; the 50 milligrams is data that's still in process will be, you know, of course, we will be following it, but it's nothing that's given us cause for concern. And as you said, these are these numbers, and what we've been seeing is well below what's typically seen in drugs that are used to treat patients with depression. So, again, you know, we'll be able to say more about it as the study finalizes, but not something that's given us pause. Got it, thanks.

Sort of dramatic differentiation for is around a lot has to do with the concept that were that were pursuing and its very patient patient centric is as Mike was talking about the idea is and this is based on our data that we're able to treat patients when they need it providing prolong periods in patients with or without meat.

For additional medicines, so what we've seen in study after study its a very consistent profile that two weeks of therapy results in prolonged benefit for patients and that's what we're looking to demonstrate both in waterfall oral in postpartum depression trial.

Very very different you know when you think about some of the features here a really easy to take its once a day a capsule people take it at home we are doing all out patient trials.

Operator: Thank you. And our next question comes from the line of Laura Chico with Woodbush Securities. Your line is open.

We are seeing in the shoreline study you know 70% of patients more than 70% of patients that require more than two.

Operator: Please go ahead. Hey, thanks guys for taking the question and sending our best to Jeff. I've got two questions here.

Treatments of the course of the year, that's what patients are looking for they're looking for a medicine that treats them.

Jim Doherty: I guess first on Zoranolone, I'm just wondering if you could elaborate a little bit more on the clinical pharmacology safety data. At this point, what additional clinical studies outside of landscape are going to be necessary for an NDA submission? And then maybe one on 718.

It doesn't become you know we sometimes say this as you know we want to treat disease address stigma, but not have this become.

A lifestyle for people to be on medicines chronically and so when we think about all the features that were building not just into the into the program, but also the mechanism. It really provides for all of those features so that's very different you know it's different from any of the other things that are available. So the psychiatrists any of the things that weve had available it's a unique mechanism.

Jim Doherty: Obviously, there's this little advisory committee meeting tomorrow for it in the Academy lab. And I guess, you know, in the backdrop of that, I'm just wondering how the outcomes there might influence your development strategy for 718 in Alzheimer's, just, I guess, perhaps most specifically on outcomes relating to executive function and memory. Thanks very much. Hello, this is Jim.

I mean, absolutely a very differentiated profile you think thats based on the science and it's what we've been pursuing and what were so excited about.

And maybe just one because someone else seems to have fallen on C.J. I think the other apartment. He mentioned that level differentiation is the optionality that we're creating through the program as well and we think about just in the MDD program with the RT indication in the tree as needed indication, we're going to get patients and physicians options to choose how they want to treat.

Jim Doherty: Yep, happy to take both questions. So the Zaranulone question: clinical pharmacology. So we do have a sort of a standard package of clinical pharmacology studies that we are running through to support the Zaranulone filing. You know, these are things like drug-drug interaction studies and things like that. These are pretty standard package studies.

The railroad they want to kill initiate with antidepressants. They would have that option. If we get the past R&D if they want to treat as many of which we think is still the endgame and that is the true level of differentiation, we're shooting for to shift the paradigm, but we'll give those options because as you can imagine it does take time to change a paradigm the way that we're talking about right, so giving patients and physicians on.

Jim Doherty: So, you know, the clinical pharmacology package for Zaranulone is part of the overall program design. We don't end up talking about those studies a whole lot, but you might get a question about them. I think the short answer is the team did a great job of building those studies and the timing for those studies into the overall program. And, of course, we are able to use data from those studies in multiple ways to support the program. Certainly, when we talk about modeling safety and tolerability, we're also including results from those studies into the overall program. So the ClinPharm package for Zaranulone is moving along quite well. To stage 718, yes.

Options with the level of differentiation in the product profile that we're seeing with around what we think is very compelling.

I think can we get back to you on a similar question.

Sure Mike Yes, good question around some on it I think what you're asking is how are we thinking about results.

From the ongoing studies to how we use them and move the program forward and you know I think this is just another example of the approach we take to R&D. It. If you if you look at.

Our more mature programs, whether it'd be resources around loan or even sage through Q4 are you seeing that sort of proactive and predictive approach, where we do this in a data driven away.

And I think that that is what we'll continue to do we these open label studies provide us with a wealth of information both in terms of.

Which patients are responding and how but also perhaps as importantly, it gives us experience. We're working with these patient populations and working with the endpoints that we want to take into later stage clinical studies. So when I talk about collecting all the data certainly the efficacy and Tolerability data, but it's also.

Jim Doherty: So, of course, for us, I was mentioning it earlier, what we see is the opportunity to modulate NMDA receptor function to improve cognitive performance. And it's certainly the case that a lot of the science in Alzheimer's disease suggests that NMDA receptor modulation is relevant for AD as well. Yeah, adecanumab is certainly the news of the week this week.

So the experience we have in working with the patient populations working with the clinical sites associated and really it's pulling all that information together to understand where to best move into next and I think beyond that we don't want to speculate on specifics the studies for seven one and our ongoing so we're going to collect.

As data as we have four are much more mature programs.

We'll be reading out on results from the studies and that will also inform our pathway forward.

Jim Doherty: And I think, of course, a different approach there. That's looking at a disease modification approach to clear A-beta in Alzheimer's disease. And, you know, I think we see that as... It's just a very different approach, and certainly the approach that we're taking for symptomatic improvement of performance by enhancing NMDA receptor function is probably complementary to approaches for disease modification, and I think the real point is that there is a tremendous amount of unmet medical need in a number of neurodegenerative disorders, including Alzheimer's disease, but also certainly Parkinson's disease, pron So we'll take the data from our studies that are running, and we'll make decisions moving forward about what are the best patient populations that we think can benefit from this approach. Thanks very much.

Yeah, and if I just add.

I'd just add one more thing to that this is Ken I am sorry, but no.

As well as Mike mentioned earlier, we take a portfolio approach, but it's not an either or when it comes to be thanks to this is a matter of we have all these opportunities going to its a matter of thinking about balancing the near mid and long term opportunities. So.

There will always be thinking about that the breadth of the pipeline I think making precision.

Super helpful. Thank you very much for the detailed answers.

Thank you and our next question comes from the line of Gary Nachman with BMO capital markets. Your line is open. Please go ahead.

Hey, good morning, its rothsay on for Gary I was hoping you could provide an update on the status of your collaboration with should now be and how that is progressing and then just more broadly I'm curious, how you're thinking about the potential for additional collaborations or out licensing transaction.

For specific assets geographies or indication. Thank you.

Yeah, I'll take that one its Mike on first on Shino eat. So we're really pleased with how that collaboration is playing out they are entering the phase two program.

Jim Doherty: Thank you. And our next question comes from a line from Matthew Harrison with Morgan Stanley. Your line is open. Please go ahead. Hi, this is John Ong from Matthew.

In Japan, or if we are collaborating very closely within these see all the data that we see we have a very much a life mindedness with with the in terms of how we approach Saran loan just as a reminder, they have the rights to surround alone in Japan, South Korea, and Taiwan, but very pleased and making good progress on that program on your second question just in general.

Operator: Thanks for taking our question. Would you maybe talk about the stopping rules related to events of excessive sleepiness or loss of consciousness in the random studies? For example, what would trigger a data safety monitoring board review?

Sort of what is our strategy around our BD strategy remains the same strategy for BD has always been and will be if we can accelerate access for patients. If we can accelerate indications development and access for patients and also build capabilities, that's really the sweet spot as to how we think about business development.

Jim Doherty: Yeah, so I think the short version is, as we've always said, we're not seeing signs of loss of consciousness in the Zoranilone program. Steve, I don't know, is there anything you wanted to add? No, I think that's it. You know, in all the studies that we've conducted to date, we haven't, we just haven't seen it. And of course, that was, that was by

Encino. He is a great example, right the expansion that we saw in Asia allows us to accelerate access to patients. There is the potential to and we found a partner that sees what we see in the Ramlo right. The ability to develop this program to shift the paradigm in multiple markets around the world. That's what we look for so again, we're really pleased with the collaboration our strategy on BD will.

Steve Kaines: Xeranilone is a very different drug; while it shares some pharmacology, it's a different drug. And now, with, you know, greater than 2,500 patient exposures, we're very, you know, we're starting to see a very consistent and well-demonstrated benefit-risk profile for the drug. And that's the most important thing, whether we're talking about 30 milligrams or 50 milligrams, the drug is performing very, very consistently from a safety perspective. It's something that we're really excited to see, even with the early Shoreline data. I got it.

When you are looking for ways to accelerate access for patients.

Thanks.

Thank you and our next question comes from the line of that question with H.C. Wainwright. Your line is open. Please go ahead.

Sir your line might be on mute.

Hi, Chris on for Doug can you hear me.

Yes.

Awesome. So two quick ones for me, what's your strategy for all the three to four program. You know if you see a good efficacy signal in kinetic what study can be expect next may be would be another proof of concept in another neurological indication, maybe a dose ranging study or would you try to jump into a phase three.

Operator: Thanks. Thank you. And our next question comes from the line of Jay Olson with Oppenheimer. Your line is open.

And my second question is about the right. So are you mentioned that you're kind of refocusing your commercialization resources away from that or what if anything could change your mind to invest more into the rest. So thanks.

Operator: Please go ahead. Hey guys, thanks for taking my questions. I had a couple, but maybe start with a big picture question.

Hi, Chris This is Jim I'll take the three to four question and then I'll pass it over to Mike talked about verso.

Jim Doherty: Can you talk about the potential advantages of the GABA-HAM versus NMDA antagonist for the treatment of MDD, and how do you see the differentiation of the ranilone versus some of the other drugs in development for MDD that target NMDA? And then maybe just a follow-up on SAGE 718. Can you just talk about how you plan to decide which development plan to pursue with SAGE 718 given all the different indications that are under consideration? Thank you. So, to the GABA-PAM question, I'll talk a little bit about your question around the differentiation in mechanisms, and I'll ask Steve to sort of weigh in on what we see as the advantages of Zoranolone as a therapy relative to some of the other approaches that are out there.

Yeah. So I think the three to four program as we said front end of a neurology franchise and we certainly see multiple opportunities in the neurology space for.

For a three to four and for our franchise I think our focus.

In the say three to four program at the moment.

Is very much on essential tremor. It is 6 million people in the U.S. alone suffer with essential tremor and it has been since 1967 since there has been a a approval.

To treat essential tremor. So we think there is both a huge amount of unmet medical need and a space that sort of ripe for innovation. So the a the current study the kinetic studies, it's going on builds off of what we've learned we have in previous time.

Times done small studies with our other GABAA pans showing benefits in reducing tremor activities and then last year in our phase one studies, we did some open label work showing that indeed, indeed with stage three to four we also see that reduction in tremor amplitude, but really the the the kinetic study.

Jim Doherty: Yeah, so, of course, GABA-PAM, and NMDA-NAM, you're talking about two receptors that are very much involved in the ongoing activity in brain circuitry. So, GABA-PAMs tend to dampen down activity. NMDA receptors increase activity. So, if you have blockers of that, you're also decreasing activity. But, of course, that's at the very, very highest level. There's a lot of, So, I'm going to focus on that, depending on which parts of the brain we're talking about and exactly how those are acting in the circuitry.

Is intended to build on that it is a placebo controlled double blind study over 28 days. So that provides us with a wealth of information and then I think you know beyond that.

Depending on outcomes, we will the teams building on what the plan looks like for three to four moving forward in the central Tremor went on to speculate too much on which studies in what order, especially until we have results from that the from the study, but a lot of work going on for essential Tremor and then Tim you were talking about earlier, we take a disk.

Jim Doherty: So, it's a little hard to make direct comparisons, but I think you can go all the way down to how these different systems work. What we like about the GABA-PAM mechanism, especially neuroactive steroids that have effects on these extrasynaptic receptors, is they're perfectly well-suited to sort of dampen overactivity in brain regions where there's just too much activity going on. And whether we're talking about essential tremor or other things like that, or whether we're talking about overactive brain circuits in depression, we do think that the neuroactive steroid GABA-PAMs, like xeronalone, are just very well-positioned to provide relief from that overactivity without causing other major changes in ongoing function.

Upland approach to thinking about our sequencing of studies across the board, we do still keep an eye on the opportunity for stage three to four in epilepsy and in Parkinson's disease and that is something that the team continues to evaluate at this point.

And then I think Michael I'll hand over to you talk about for us.

Thanks, Jim and for the questions is also as you probably know our focus now is on the geography than an active treating site. They are willing to take patients and treat them with with the rest so take it back and we did the restructuring as Kenny mentioned back in April to rightsize the support in the resources onto the rest. So so that we could free up resources to invest.

Steve Kaines: So, Steve, would you want to take the question around implications for xeronalone? Sure. I mean, I think the most dramatic differentiation for Zoranolone has to do with the concept that we're pursuing. And it's very patient-centric, as Mike was talking about. The idea is, and this is based on our data, that we're able to treat patients when they need it, providing prolonged periods of treatment without the need for additional medicines. So what we've seen in study after study, it's a very consistent profile, that two weeks of therapy results in prolonged benefit for patients. That's what we're looking to demonstrate both in waterfowl and coral in the postpartum depression trial. Very, very different.

And those three pads that we've talked about was the rent alone in the rest of the pipeline. It was a tough decision to ramp down some of the investment. We have is the recipe, but we're still committed to supporting those those sites in those geographies that have active treating site. We'll always look at our resource allocation you can imagine in a world of coated right. There are some challenges and cold and in terms of sites of care and their ability to take Asia.

Ben and also patients willingness to go into hospital setting during a little bit, but we'll continue to support those sites and we'll continue to look at the resource allocation make sure it fits within our overall resource allocation strategy.

Oh, thank you.

Thank you and this does conclude our Q any portion of today's conference and I would like to turn the conference back over to Mike Cronin for any further remarks.

Thanks, Michelle and thanks, everyone excellent. Thank everyone for joining this morning, thanks for all the well wishes for Jeff and I will appreciate that and it's doing well now we're excited to hear that and we're really pleased with our progress over this quarter, but throughout this year. This is the year of execution for stage and we're very much looking forward to the next 12 to 18 months, which is very catalyst rich and the pension potential but thats been on.

Steve Kaines: You know, you think about some of the features here. It's really easy to take. It's once a day, a capsule; people take it at home. We're doing all outpatient trials. We see in a Shoreline study, you know, 70% of patients, more than 70% of patients that require more than two treatments over the course of the year. That's what patients are looking for. They're looking for a medicine that treats them but doesn't become, you know, we sometimes say this is what we want to treat the disease.

Offers us so we look forward to updating you on future calls and thanks again for joining us have a good day.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect everyone have a great day.

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Steve Kaines: We want to address stigma but not have this become, you know, a lifestyle for people to be on medicines chronically. And so, when we think about all the features that we're building, not just into the program, but also the mechanism, it really provides for all of those features. That's very different.

Mike Clunan: You know, it's different from any of the other things that are available. Some of the psychiatrists, any of the things that we've had available; it's a unique mechanism and absolutely a very differentiated profile. We think that's based on the science and it's what we've been pursuing and what we're so excited about. And maybe just one question before the 718 question, Jim, as you were following up on Steve, Jay, I think the other part where Steve mentioned that level of differentiation is the optionality that we're creating through the program as well, right? When you think about just in the MDD program with the RRT indication and the treat as needed indication, right, we're going to give patients and physicians options to choose how they want to treat with Zoranilone.

Mike Clunan: If they want to co-initiate with antidepressants, they would have that option if we got past RRT. If they want to treat as needed, which we think is still the end game, and that is the true level of differentiation we're shooting for to shift the paradigm, but we'll give those options. Because, as you can imagine, it does take time to change a paradigm the way that we're talking about, right? So giving patients and physicians options with the level of differentiation and the product profile that we're seeing with Zoranilone, we think is very compelling. I think we can hand it back to you on those 718 questions.

Jim Doherty: Sure, Mike. Yeah, and the question around 718, I think what you're asking is, you know, how are we thinking about results from the ongoing studies and how will we use them to move the program forward? And, you know, I think this is just another example of the approach we take to R&D. And if you look at our more mature programs, whether it be Zoroastros, Oranalone, or even SAGE 324, you're seeing that sort of proactive and predictive approach where we do this in a data-driven way, and I think that, you know, that is what we'll continue to do. These open-label studies provide us with a wealth of information, both in terms of which patients are responding and how, but also, perhaps as importantly, they give us experience working with patient populations and working with the endpoints that we want to take into later-stage clinical studies.

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Jim Doherty: So, when I talk about collecting all the data, it's certainly the efficacy and tolerability data, but it's also the experience we have in working with patient populations, working with the clinical sites associated with them, and really, it's pulling all that information together to understand, you know, where to best move next. And I think beyond that, I wouldn't want to speculate on specifics.

Kimi E. Iguchi: The studies for 718 are ongoing, so we're going to collect those data as we have for our more mature programs. We'll be reading out our results from the studies, and that will also inform our pathway forward. Yeah, and if I could just add one more thing to that? This is Kimi. I'm sorry. But, you know, as Mike mentioned earlier, we take a portfolio approach. But it's not an either or when it comes to these things, too.

Kimi E. Iguchi: You know, this is a matter of, we have all these opportunities, and it's a matter of thinking about balancing the near, mid, and long-term opportunities. So, you know, there's, we'll always be thinking about the breadth of the pipeline as we make these decisions. Super helpful; thank you very much for the detailed answers.

Mike Clunan: Thank you. And our next question comes from the line of Gary Nachman with BMO Capital Markets. Your line is open. Please go ahead. Hey, good morning. It's Rafay on for Gary.

Mike Clunan: I was hoping you could provide an update on the status of your collaboration with Shinogi and how that is progressing. And then, just more broadly, I'm curious how you're thinking about the potential for additional collaborations or out licensing transactions for specific assets, geographies, or indications. Thank you.

Mike Clunan: I'm first on Shinogi. So we're really pleased with how that collaboration is playing out there, and during the Phase II program in Japan, we are collaborating very closely with them. They see all the data that we see.

Mike Clunan: We have a very much like-mindedness with Shinogi in terms of how we approach Zoran loan, just as a reminder, they have the rights to Zoran loan in Japan, South Korea, and Taiwan, but they are very pleased and making good progress on that program. On your second question, just in general, sort of what is our strategy, right? Our BD strategy remains the same, right? Our strategy for BD has always been and will be if we can accelerate access for patients, if we can accelerate indications, development, and access for patients, and also build capabilities, that's really the sweet spot as to how we think about business development. And Shinogi is a great example, right?

Mike Clunan: That expansion that we saw into Asia allows us to accelerate access to patients there, at least the potential to, and we found a partner that sees what we see in Zoran, right? The ability to develop this program to shift the paradigm in multiple markets around the world. That's what we look for. So again, we're really pleased with the collaboration and our strategy on BD. We'll continue looking for ways to accelerate access for patients. Thank you. And our next question comes from the line of Douglas Cho with HC Wainwright. Your line is open. Please go ahead. Sure, your line might be on mute.

Operator: Hi, Chris Bielson on behalf of Doug. Can you hear me? Yes. Awesome. So, two quick ones for me.

Jim Doherty: What's your strategy for the 3-2-4 program? You know, if you see a good efficacy signal in kinetic, what study could we expect next? Maybe it would be another proof of concept and another neurological indication, maybe a dose-ranging study, or would you try to jump into phase three? And my second question is about Zolresso. You mentioned that you're kind of refocusing your commercialization resources away from that. What, if anything, could change your mind to invest more in Zolresso?

Jim Doherty: Thanks. Hi Chris, this is Jim.

Jim Doherty: I'll take the 3-2-4 question, and then I'll pass over to Mike to talk about Zorreso. Yeah, so I think the 3-2-4 program is, as we said, the front end of a neurology franchise, and we certainly see multiple opportunities in the neurology space for 3-2-4 and for a franchise. I think our focus in the SAGE 3-2-4 program at the moment is very much on essential tremor. It is 6 million people in the U.S. alone suffer with essential tremor, and it has been since 1967 since there has been approval.

Jim Doherty: We think there's both a huge amount of unmet medical need and a space that's sort of ripe for innovation. So the current study, the kinetic study that's going on, builds off of what we've learned. We have in previous times done small studies with our other GABA PAMs showing benefits in reducing tremor activity. And then last year, in our phase one studies, we did some open label work showing that indeed with stage 324, we also see that reduction in tremor amplitude. So really, the kinetic study is intended to build on that. It is a placebo-controlled double-blind study over 28 days. So that provides us with a wealth of information. And then, depending on the outcomes, the team is building on what the plan looks like for 324 moving forward in the central tremor. I wouldn't want to speculate too much on which studies in what order, especially until we have results from the studies.

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Jim Doherty: But there is a lot of work going on for central tremor. And then, as Kimmy was talking about earlier, we take a disciplined approach to thinking about our sequencing of studies across the board. We do still keep an eye on the opportunity for stage 324 in epilepsy and in Parkinson's disease.

Mike Clunan: And, you know, that is something that the team continues to evaluate at this point. And then, I think, Mike, I'll hand over to you to talk about thoracic. Yeah, thanks, Jim. Yeah, so the question on Xoreso, as you probably know, our focus now is on the geographies that have an active treating site that are willing to take patients in and treat them with Xoreso.

Mike Clunan: To take it back, you know, we did the restructuring, as Kimi mentioned, back in April to right-size the support and the resources on Xoreso so that we could free up resources to invest in those three paths that we've talked about with XorenaLoan and the rest of the pipeline. So it was a tough decision to ramp down some of the investment we have with Xoreso, but we are still committed to supporting those sites and those geographies that have active treatment sites. We'll always look at our resource allocation. You can imagine in the world of COVID, right? There are some challenges with COVID in terms of sites of care and their ability to take patients in, and also patients' willingness to go into a hospital setting during COVID.

Mike Clunan: But we'll continue to support those sites, and we'll continue to look at resource allocation and make sure it fits within our overall resource allocation strategy. Thank you. Thank you, and this does conclude our Q&A portion of today's conference, and I would like to turn the conference back over to Mike Clunan for any further remarks. Thank you, Shel. And thanks, everyone. I just want to thank everyone for joining us this morning. Thanks for all the well wishes for Jeff. I know he'll appreciate that. He's doing well.

Mike Clunan: We're excited to hear that, and we're really pleased with our progress, you know, over this quarter, but throughout this year. This is the year of execution for SAGE. And we're very much looking forward to the next 12 to 18 months, which are very catalyst-rich, and the potential that that then offers us.

Operator: So we look forward to updating you on future calls. And thanks again for joining us. Have a good day. Ladies and gentlemen, thank you for participating in today's conference. This does conclude the program and you may all disconnect. Everyone, have a great day. ??? My Outro For My 20th Birthday ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ??

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