Q3 2024 Sage Therapeutics Inc Earnings Call
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Speaker Change: Good afternoon! Welcome to Sage TherapyDix third quarter 2024 financial results conference call. Currently, all participants earn a listen only mode.
Speaker Change: This calls being webcast-life on the investors and media section of Sage's website at sagerx.com
Speaker Change: This call is a property of sage therapeutics and recording reproduction or transmission of this call without the express written consent of sage therapeutics is strictly prohibited.
Speaker Change: Please note that this calls being recorded. I would now like to introduce Katie Plant, Manager of Investor Relations at Sage.
Katie Plant: Good afternoon and thank you for joining Sage TherapyDex, third quarter, 2020 for a financial results conference call. Before we begin, I encourage everyone to go to the Investors and Media section of our website at saiderx.com. Where you can find the press release and slides related to today's call.
Katie Plant: I would like to point out that we will be making forward-looking statements which are based on our current expectations and beliefs.
Katie Plant: These statements are subject to certain risk-send uncertainties and are actual results made different materialies. Please review the risk factors discussed in today's press release and in our SEC filings for additional details.
Speaker Change: We will begin the call with prepared remarks by Barry Greene, our chief executive officer who will provide an overview of our progress during the third quarter of 2024.
Speaker Change: Our Chief Business Officer, Chris Benecchi, will provide an update on the ongoing commercialization of the review that we will then be joined by Laura Gault, our Chief Medical Officer, who will review development activities across our programs.
Speaker Change: We will review our financial results from the third quarter of 2024. Mike Gault, our chief scientific officer, will be available for questions during the Q&A portion of the call. With that, I will now turn the call over to Barry.
Barry Greene: Thanks Katie and thank you everyone for joining us this afternoon.
Barry Greene: Discovery and New Medicines, and bringing them to market, especially in brain health, is a formidable challenge. But one successful has potential for major advances in human health.
Barry Greene: The impact of our work in postpartum depression is an important example of this. However, other areas of drug development, including the most devastating brain health conditions, remain the next frontier.
Barry Greene: Recent pipeline setbacks require us to further focus our business priorities.
Barry Greene: We asked earlier this month that we are implementing a reorganization or business operations, intended to strengthen our balance sheet and focus investment to support the ongoing law in Sub-Zulu Bay for the treatment of women with TPD, are upcoming readout in hunting season these.
Barry Greene: and Explore opportunities across our early stage pipeline.
Barry Greene: The decision with the necessary.
Barry Greene: We believe that the three structuring will right-side stage for future success. I'm grateful to all our employees, including those departing, for their impact on our business and dedication to making the difference for patients.
Barry Greene: i
Barry Greene: As you've seen our recent press release, we're also making the strategic decision to stop making Zorresto, commercially available after December 31, 2024.
Barry Greene: As we've noted, we've made progress in supporting more women with PPD and for a lot of shows we've made. And we see this important treatment, the exhalaring change in the PPD treatment paradigm.
Barry Greene: With the increased demand for Susueva and the treatment of women with TBD, we're also seeing an expected decrease in demand for the Rosso.
Barry Greene: We believe healthcare providers who have prescribed the Russell will continue to transition to the resume and that women with PPD will be well supported by your evening.
Barry Greene: It's a logical business decision to continue availability and focus our resource on your survey, so we can help even more women with TPD.
Barry Greene: Now, as we are focused on PPD, the agent biogen will also not pursue further development of Zuranalone, as the treatment for major depressed disorder in the US.
Barry Greene: Based on the significant new investment and time we expected being needed to deduct the additional studies, and we're prioritizing our resources on supporting a PPD patient community.
Barry Greene: We're grateful to all the patients for vitres and advocates who support our clinical trials and efforts in MDD.
Barry Greene: We believe these decisions will provide us with the agility, cash right away and focus to advance our business.
Barry Greene: We continue to build a foundation for the future that supported by the momentum we're seeing with the regime. Last year we set a goal to establish Serge U.A. as a first-line therapy and standard care for women with TBD.
Barry Greene: We're making progress as demonstrated in our third consecutive quarter of solid growth.
Speaker Change: Do you think they have a critical role in advancing TPD here by helping to support a dialogue between healthcare providers and women with TPD? A condition that has often been stigmatized and under-true.
Speaker Change: As a result, war women have the potential to be treated for PPD and more OBTOMs should begin to screen, diagnose, and treat this disorder.
Speaker Change: We believe the shift in practice patterns is starting among OBGYNs, going out integrating from a terminal mental health, the obstetric care, and initiating medical treatment for PPG.
Speaker Change: In fact, once an OB-GYN has written in the review way, on average we see an encouraging increase of the number of women with TBDD tree based on written prescriptions for all medications.
Speaker Change: I'll just help you for subscribers, for scribing, for Zubing, and majority are using Zubing as a first blind PPD treatment.
Speaker Change: We're seeing broad and favorable coverage.
Speaker Change: for the resume of the TV. And progress across the ecosystem continues to energize their efforts.
Speaker Change: This launch, when we look at TVD, are going online and sharing the treatment success stories, medical associations are publishing screen guidelines, payers are recognizing the benefit of innovation, and the media continues to discuss TVD as an urgent and treatable medical condition.
Speaker Change: While progress and overall screening rates for PPD is encouraging, it should be the first staff in a deliverable process to ensure women or diagnosed with PPD understand their options for care.
Speaker Change: Chris will provide more specific breakdown of our commercial performance in Q3. Looking ahead, we plan to continue to scale with success and believe that our strategic investments, including our recent self-first expansion, will accelerate the demand and market growth for ZUVA and TPDG.
Speaker Change: Now, turning to the pipeline, earlier this month, we reported that the Phase 2 Lightway Study in Alzheimer's disease did not meet the primary endpoint. We're disappointed for the millions of patients suffering with Alzheimer's disease.
Speaker Change: will look forward to reporting top-line data from the Phase 2 Dimension Study of Dallas, and Amber, and people with cognitive impairment, associated with hunting disease, expected later this year.
Speaker Change: Finally, we announce in September that Friday has decided to terminate our collaboration and license agreement with a SA324 program.
Speaker Change: with the termination of this agreement, they need to have full ownership of stays 3-2-4. And we plan to continue to evaluate potential indications if any from the program.
Speaker Change: We anticipate that any future investment in SEAS 324 will be based on a broader portfolio review and pipeline prioritization.
Speaker Change: Our commitment to advance brain health medicines endures through our successes and setbacks. Patient impact, long-term growth, and value creation remain our guiding principles.
Speaker Change: With that, I'll turn the call over to Chris to provide additional context on the ongoing commercialization of Xerzuvia. Chris?
Chris Benecchi: Thanks Barry. We have achieved notable progress in our launch of Zerzuve over the third quarter. We are making notable strides in our goal to establish Zerzuve as the first-line therapy and standard of care for women with BPD.
Chris Benecchi: Zerzuve generated $22.1 million in total revenue in the third quarter of 2024, of which SAGE recognized $11 million in collaboration revenue.
Chris Benecchi: This represents a 49% growth in revenue over the second quarter.
Chris Benecchi: We also observed increased demand, as measured by shipments in the third quarter, with approximately 2,000 prescriptions filled and delivered to women with PPD. This represents an approximately 40 percent growth compared to the second quarter.
Chris Benecchi: Inventory levels have normalized since the initial bill that launched. Additionally, we saw a reduction in the percentage of free goods as commercial and Medicaid policies covering Zerzouve have been implemented.
Chris Benecchi: Prescriber trends also signal encouraging growth of Zerzuve as a treatment for women with BPD. We're building from a strong foundation with data that suggests 90% aided brand awareness among OBGYNs and psychiatrists.
Chris Benecchi: Prescribers and repeat writers continue to increase quarter over quarter with most new prescriptions initiating after an interaction with a sales representative.
Chris Benecchi: These data and trends reinforce our view that this is a promotionally sensitive market with potential to further scale as we've recently done with our field Salesforce expansion.
Chris Benecchi: Their ZUVAE is being prescribed across a breadth of HCPs who treat PPD. Importantly, OBGYNs continue to lead the way, accounting for 70% of all prescribers.
Chris Benecchi: A majority of the OBGYNs who first wrote a script prior to July 2024 have written multiple prescriptions. This is noteworthy as OBGYNs are at the forefront of peripartum care, seeing these women at the most critical time to screen, diagnose, and treat PPD.
Chris Benecchi: At the same time, we continue to recognize broad and equitable coverage as a critical element of our efforts to ensure women with PPD get access to this important treatment.
Chris Benecchi: As of today, more than 90% of commercial and Medicaid lives are covered, with a vast majority of policies enabling first-line access to Zerzuve for women with PPD, without burdensome prior authorizations.
Chris Benecchi: I'm pleased to report that all three national PBMs have now developed favorable coverage policies for Zerzuvia in the treatment of PPD. The progress we've made this quarter speaks to the need and strong value proposition for Zerzuvia in the treatment of women with PPD.
Speaker Change: Barry articulated our grill strategy when we launched their Zouvet at the end of 2023. To think big about the opportunity in PPD, start with a focused approach and scale strategically with success.
Speaker Change: Our plan to accelerate growth of Zerzuvia in PPD is centered around three key areas. First, we plan to continue to expand the HCP prescriber base through field force expansion and increasing peer-to-peer engagement, education, and awareness programs in Q4.
Speaker Change: SAGE's expanded sales force is in the field as of the start of Q4. We plan to support repeat writing in PPD by prioritizing a positive clinical and brand experience, including through an efficient prescription fulfillment process.
Speaker Change: Our goal is for HCPs and women with PPD prescribed Zerzuve to feel supported throughout the process.
Speaker Change: And finally, we plan to leverage targeted media, digital channels, and social media influencers to empower more women to discuss their PPD symptoms with their ACP and ask if Zerzube is an appropriate treatment option.
Speaker Change: We are inspired by the ongoing efforts of the PPD community to create real and lasting change in the healthcare system, which fuels our shared commitment to support women with PPD.
Speaker Change: I look forward to sharing updates on our commercialization efforts in the coming quarters. With that, I will turn it over to Laura to highlight our pipeline updates. Laura?
Laura Gault: Thanks, Chris, and good afternoon, everyone.
Laura Gault: We continue to believe that ThruZube is contributing to the growing momentum in the health care community to recognize and treat PPD. I am encouraged by the progress we are making and the potential to help even more women with PPD.
Laura Gault: With regard to the clinical stage pipeline, in early October we announced the results from the Phase 3 Light Wave Study in Alzheimer's disease.
Laura Gault: Unfortunately, there was not a statistically significant difference from baseline to day 84 in participants treated with galsenemdor versus placebo as assessed by the WAIS-IV coding test, the primary endpoint.
Laura Gault: A difference between Delsinumbre and placebo was also not observed for secondary endpoints.
Laura Gault: Given these results, we do not plan to pursue further clinical development of Dalton and Doran Alzheimer's disease.
Laura Gault: While we are disappointed by the findings from the Light Wave Study, we extend our gratitude to all the participants, investigators, care partners, patient advocates, and the broader Alzheimer's community, all of whom contributed to this important research.
Laura Gault: We are also conducting the Phase 2 Dimension Study that evaluates Galvin-Mdor and people with cognitive impairment associated with Huntington's disease.
Laura Gault: This cognitive impairment affects the ability of people with Huntington's disease to work and care for themselves and there are currently no treatments.
Laura Gault: We look forward to the top-line data from the Dimension Study, which are expected later this year.
Laura Gault: We continue to evaluate options across our early stage pipeline, including one I'll highlight today, Stage 319.
Laura Gault: This work is built on the insight that alterations in inhibitory GABA signaling may play an important role in the pathophysiology of many brain health disorders.
Laura Gault: Phase 319 is an extra-synaptic-preferring GABA-A receptor positive allosteric modulator, or PAM, that is designed to be differentiated from the other GABA-PAMs in our portfolio.
Laura Gault: With SAGE 319 we see an opportunity to treat neurodevelopmental disorders where current treatment options are limited.
Laura Gault: I want to close on a note of appreciation for the hard work and dedication of our teams.
Laura Gault: They are on the front lines of advancing our understanding of the treatment of brain health disorders.
Speaker Change: Now, I will turn the call over for a review of our financials. Kimi?
Kimi: Thanks, Laura. Our financial results for the third quarter 2024 are detailed in our press release issued this afternoon.
Kimi: As Chris mentioned, we reported collaboration revenue from the sales of their Zouvet of $11 million in the third quarter.
Kimi: As a reminder, our reported collaboration revenue is 50% of the net revenues Biogen reports for ZoZooVe.
Kimi: Note that certain variables in the fourth quarter, including holidays, could influence revenue.
Kimi: Turning to operating expenses, R&D expenses were $54.6 million in the third quarter of 2024.
Kimi: SG&A expenses were $53.2 million in the third quarter of 2024.
Kimi: We expect operating expenses to decrease in 2025 relative to 2024.
Kimi: Our net loss for the third quarter of 2024 was $93.6 million.
Kimi: We ended the third quarter of 2024 with cash, cash equivalents, and marketable securities of approximately $569 million.
Kimi: As we stated in our reorganization announcement earlier this month,
Kimi: We anticipate that implementation of the reorganization will extend our cash runway, and we plan to update cash runway guidance in the near future.
Kimi: Finally, I want to thank my colleagues for the opportunity to work alongside you as we built a company with a tremendous team. I'm proud of our efforts.
Kimi: especially in revolutionizing the approach to postpartum depression.
Kimi: It's been a privilege to make an impact in this area and I wish you all continued success.
Speaker Change: I'll now turn it over to Katie to handle Q&A with the operator. Katie?
Katie Plant: Thanks Kimi. I will ask that you limit yourself to one question. If you have an additional question, feel free to return to the queue. Now I will turn it over to the operator to oversee Q&A. Operator?
Speaker Change: Thank you. If you would like to signal with questions, please press star 1 on your touchtone telephone. If you're joining us today using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that will be star 1 for questions, star 1.
Speaker Change: And our first question today comes from Anupam Rama with J.P. Morgan.
Anupam Rama: Hey guys, thanks so much for taking the question. I know it's only been a few weeks, but wondering what color you can provide on sort of what you're seeing on script trend from the Salesforce expansion. Thanks so much.
Speaker Change: Hey Anupam, thanks, appreciate it. So as we highlighted in the prepared remarks we
Speaker Change: put the sales force in for the fourth quarter. So they're out there in the field.
Speaker Change: Given the promotional sensitivity we've seen with the territories that were already, we're confident that we're going to see an uptick with these, but it's too early to provide any guidance or color, other than they're in the field and operating effectively.
Speaker Change: Got it. Thanks so much for taking our question.
Speaker Change: Thank you.
Speaker Change: Hi guys, this is Srinath from Salvation. Thanks for taking our question.
Speaker Change: Just a couple from our side, could you speak to your early-stage pipeline and if we'll be seeing any data there next year or the indications for stage 319? And also regarding the specialty pharma process for Zunzube, any color on the optimization there and if there's been any reduction in the lag between the prescriptions written and shipped?
Barry Greene: Let me let me start with Specialty Farmers Azuve and then I'll turn it over to Laura to talk about the pipeline. So you know as as we talked about in the last quarter
Barry Greene: working with specialty pharmas is newer to the OBGYNs and just to be clear OBGYNs
Barry Greene: and that health care provider office is the right place to intercept PPD for moms early in the disease progress. So as we educate and implement additional solutions, that process is getting better and better. You know, we're not really hearing much complaints about
Barry Greene: drug getting shipped to moms homes. In fact, it's a very efficient process that continues to improve quarter on quarter.
Laura Gault: Laura, you want to talk about the early stage pipeline? Yeah, sure. So as I highlighted on the call, one of the interesting compounds in our early stage pipeline is SAGE 319.
Laura Gault: And that differentiates from other equity in our GABA portfolio because it is an extra synaptic preferring molecule.
Laura Gault: and so as compared to benzodiazepines or to our prior GABA compounds that have been in development it has a different pharmacological profile that we hope will translate into a different profile in the clinic.
Laura Gault: In preclinical data, we have seen that this compound behaves differently than benzodiazepines and the balanced GABA compound.
Laura Gault: It is currently in Phase I and we look forward to starting to uncover some of the information about how this molecule will differentiate in the clinic during the Phase I program.
Laura Gault: With regard to the rest of the early pipeline,
Laura Gault: The approach that we've taken to develop our pipeline is to really understand the role of neurosteroids in impacting brain circuitry. And we've started with the GABA-A platform and followed with the NMDA platform.
Laura Gault: But these are just two examples of how neurosteroids could influence various circuitry in the brain. And so in our earlier stage pipeline, we're looking to identify other opportunities for neurosteroids for a platform approach.
Speaker Change: Thank you.
Speaker Change: And our next question will come from Yasmeen Rahimi with Piper Sandler.
Speaker Change: Thanks team. First of all, Kimi, it's been great working with you and you'll be greatly missed. Same goes to Chris, to all of you.
Yasmeen Rahimi: What evidence can you point us to get clients excited going into the Huntington's disease readout here at your end? I appreciate color.
Speaker Change: Yes, thanks, and Kimi's gonna look forward to her retirement, but certainly has done a wonderful job helping to build SAGE.
Speaker Change: Let me start and then I'll ask Laura to talk about Huntington's and some of the earlier data we saw.
Speaker Change: Look, we, as you heard in the call, we're off to a very strong start.
Speaker Change: with the launch of ZooZoo Day and PPD.
Speaker Change: And we think seeing that continued growth of shipments quarter to quarter and really the transformation of PPD is very exciting for us. Additionally, we have an earlier stage pipeline that Laura already commented on and seeing those data move along, we think CREATE
Speaker Change: short, medium, and potentially longer-term value as we follow the science there and apply all the lessons learned from all the compounds we've already got data on to earlier stage.
Speaker Change: compounds. We were learning a lot over the last four years and applying those learnings to earlier stage pipeline. You should see some different thinking moving forward there. Laura, you want to talk about Dalles and Mdor, Huntington's and some of the earlier data and
Speaker Change: Some of the hope we have for the upcoming data readout.
Laura Gault: Sure. So, for those who may not be familiar, the DIMENSION study is our study of Delsin-Mdor in patients with Huntington's disease who have cognitive impairment. And we are expecting results from that study before the end of the year.
Laura Gault: We have a very strong scientific rationale for this study that relies on really two approaches. The first is decades of research into the role of the NMDA receptor in learning and memory.
Laura Gault: and the second is a later recognition that a neuroactive steroid 24s hydroxycholesterol is reduced in patients with Huntington's.
Laura Gault: Now, this is a neurosteroid that binds to the NMDA receptor and modulates it. And we expect that Dalzin-MDOR could be expected to modulate the receptor in the same way, restoring the function of the NMDA system towards normal.
Laura Gault: One of the interesting factors of a study in Huntington's disease is that it is a genetically defined and younger population than what we've seen in some of our other studies. That means this population is more homogeneous, that has fewer medical comorbidities, and as a consequence, it's easier to detect a signal in this population.
Laura Gault: So as we said, we don't anticipate that the results we've seen in prior studies will necessarily predict the results from dementia. We're looking forward to seeing the results from those studies later this year.
Speaker Change: Thank you so much.
Speaker Change: Thanks, guys.
Speaker Change: And the next question will come from Jay Olson with Oppenheimer.
Jay Olson: Thanks for providing this update. Could you please talk about
Jay Olson: the Takaya tree.
Jay Olson: for that opportunity to drive uptake.
Jay Olson: from TBD through telehealth. Thank you.
Speaker Change: Yeah Jay, that's a great question. I'll start and then I'll ask Chris to talk about it.
Speaker Change: As we think about the paradigm shift we're trying to drive in PPD, it really does start with those that see moms
Speaker Change: before, during, and then obviously at the birthing event, and then directly after the pregnancy, and that is...
Speaker Change: OBGYNs and nurse practitioners and physician's assistants that help them. So that's the right time frame in place to screen and then if appropriately diagnosed, diagnose and treat.
Speaker Change: And as you saw from this quarter, over 70% of the scripts are, in fact, coming from OB-GYN. So, we are intercepting PPD early in the disease process, and that's great.
Speaker Change: Some women don't get screened and diagnosed, and others, frankly, don't go on to develop symptoms until multiple months after birth, so they're outside the practice OBGYNs, so it's important for us to
Speaker Change: for us to have access and educate psychiatrists and primary care physicians so that those moms that have gotten out of the OBGYN potential screening and diagnosis can get treatment for their PPD symptoms if diagnosed. And that's really where
Speaker Change: The other disease the other specialties come in as well as talk psychiatry, you know, Chris, you want to talk further about that? Yeah, Barry. I think I think you hit it
Speaker Change: Telehealth and organizations like Tarkhairtree are a much-needed resource for new mothers.
Chris Benecchi: as they navigate the challenges of motherhood. And effectively what they do is they meet that woman at a place and time where if she needs supportive care, she's able to do so from whatever environment that she's in. So we really believe, I think, as you said, that this is going to expand the opportunity for so many women to engage with a healthcare professional and gain deeper insight into how to manage through their postpartum depression.
Speaker Change: And Jay, I think you highlighted this in terms of further uptake. It might take in certain areas of the country weeks to months to get into a psychiatrist, so this provides immediate access should a mom really need that help that Chris just highlighted.
Speaker Change: Super helpful, thank you very much.
Speaker Change: Thanks, Jay.
Speaker Change: And the next question will come from Mutu Bharal with TD Cowan.
Speaker Change: Hi, this is Athena Anh for the two. Thanks for taking the question. Another on your early-stage pipeline, what is your timeline to unveiling promising early-stage assets with cost-effective development? And would these assets also be neuro-focused or neuropsych-focused? Thank you.
Speaker Change: Thanks for your question, Athena. Let me ask Laura to start and then Mike, you might want to chime in there as well.
Laura Gault: So, you know, right now we are in the process of evaluating all of the potential assets across our portfolio and are conducting a portfolio prioritization process. You know, when that is complete, we will share more, the details about the early pipeline.
Speaker Change: And then just to build a little bit on what Laura said earlier, I think from the beginning of SAGE, there were two elements that we really focused in on in trying to understand the best way to bring forward new medicines.
Speaker Change: in brain health disorders. And one, as Laura mentioned, was understanding how the neuropathology of neurocircuits and role of neurocircuits play across a range of brain health disorders. And the other one is really around our in-house chemistry platform.
Speaker Change: that's focused on understanding, you know, usually neuroactive steroids, but I think more broadly, endogenous steroids and how they engage those neural circuits. And so while we focus, our clinical pipeline right now is really emphasized the GABA and NMDA receptors as critical ways of interacting with these neural circuits. We've also been working on research on understanding the other endogenous pathways within our chemistry platform.
Speaker Change: that can engage these circuits that go beyond just a GABA and NMDA receptor. And as we continue to evaluate those opportunities, we'll have more information to share.
Speaker Change: Got it, thank you.
Speaker Change: Thanks, Athena.
Speaker Change: Good evening, thanks for taking my question. With regards to some of the efforts in conjunction with Biogen
Speaker Change: to support women that are sort of ending up being treated by a psychiatrist rather than an OBGYN. Can you just sort of step back and give us a sense of sort of how the market dynamics?
Speaker Change: or how the market is split with regards to.
Speaker Change: you know the number of women that actually get seen by an OBGYN versus
Speaker Change: help us understand also from the sense of you know the severity of TPD if you've been able to get a better sense of how the severity level of these patients differs across the market that'll be helpful. Thank you.
Speaker Change: Tommy, thanks for the question. That's a good one. So just the numbers, as we've highlighted, over 70% of the prescriptions are coming from OBGYN, which we think is the right place to intercept.
Speaker Change: PPD. PPD, like any disease, the earlier in the disease onset you can treat, the better off typically the outcomes.
Speaker Change: and as we all know that an under-treated mom has devastating consequences not just for mom but for baby.
Speaker Change: So the ideal state is in during pregnancy or directly after the baby's born.
Speaker Change: for the OBGYN office to be the primary spot of standard screening and, if appropriate, diagnosis, and then, if appropriate, treatment with an intervention.
Speaker Change: What we're seeing, and we highlighted this in the remarks, is that once a OB-GYN uses Zerzuve, they're seeing more PPD and they're using Zerzuve more often than not and seeing that PPD. So that's the dynamic we want to create. Now as we highlighted, not every
Speaker Change: Every mom with PPD gets picked up in the weeks being treated by OB-GYN and several women develop symptoms weeks or months after delivering a baby that are PPD symptoms and that's where primary care and psychiatry comes in.
Speaker Change: But just to be clear, our real focus is to continue to grow awareness in the OBGYN office because that's the right primary intervention for PPD and we want to continue to see that the scripts flowing from OBGYNs.
Speaker Change: You also asked about the severity, so let's hit that quickly. So we are seeing mild, moderate, and severe PPD treated at all specialty levels, so it's not really differentiating by specialty. The other thing we're working on from a disease state awareness is really to help
Speaker Change: the health care community understand that since
Speaker Change: you know PPD doesn't really fit into the buckets of mild, medium, severe. A woman could show up on Monday
Speaker Change: and being diagnosed with mild PPD, only developed severe PPD on Friday.
Speaker Change: Got it. Thank you.
Speaker Change: And moving on to Brian Abrams with RBC Capital Markets.
Brian Abrams: Hi there. Thanks so much for taking my question. I'm curious, what will you guys be looking for in dimension on SDMTN across the secondary endpoints in order to move Dalz & Emder forward? Would signals or trends across all or some of these endpoints be enough? And how has the BAR evolved since the decision to restructure and refocus resources? Thanks.
Speaker Change: Hey Brian, thanks for the question. I'll ask Laura to start and I'll circle back with potential additional color.
Laura Gault: We are looking in the study for obviously a clinically meaningful change between Delsin-Mdor and placebo on this endpoint and we'd like to see that supported by meaningful changes on the secondary endpoint which is an endpoint of function called the independent scale in Huntington's disease and across some of the other secondary endpoints.
Speaker Change: Thank you, Laura.
Laura Gault: Thanks, Brad.
Speaker Change: And the next question will come from Tazine Amat with Bank of America.
Tazine Amat: Hi, good afternoon and thanks for taking my questions. On today's survey, can you potentially give us a little bit of color on breadth and depth of use? Are most of the scripts coming from physicians who have had experience?
Tazine Amat: prescribing it before and are adding to their prescriptions for other patients.
Tazine Amat: And can you just talk about the rate with which you're adding new prescribers now relative to when the launch first started?
Tazine Amat: And then to go back to MDD, can you give us a little bit of color on the details around your decision to not pursue MDD?
Tazine Amat: Is it that the trial would be difficult to design, or is it more that you feel you want to focus your resources on PPD? Thanks.
Speaker Change: Yeah, good set of questions. Let me start with MDD and then I'll provide some comment on Zuzube, but just turn it over to Chris to elaborate.
Speaker Change: In terms of MDD, as we thought about
Speaker Change: The clinical trial is required to generate a potential indication of the risk relative to our portfolio and our resource allocation. We think we're best off continuing to create, through ZUVE,
Speaker Change: as the key to unlock the blockbuster potential in PPE helping more and more moms. That's the right place for us to use our balance sheet, take risk and spend other money, particularly after a more focused size of company.
Speaker Change: In terms of, and obviously Biogen also aligns with that decision.
Speaker Change: In terms of Zerzuve, our strategy is to drive both breadth and depth of prescribers.
Speaker Change: So our field force, our non-perishable motion, our marketing.
Chris Benecchi: are direct to consumer are all out there drawing breadth and depth. Chris, you want to provide some more color? Yeah, so Barry, to reinforce what you said, we're seeing Zuzube prescribed across that breadth and depth of prescribers that you mentioned who treat BPD.
Chris Benecchi: obviously led by OB-GYNs with 70% of prescribers being OB-GYNs that we saw in the third quarter. And many of them are using Zerzube as a first-line therapy.
Chris Benecchi: So, of course, over time, over the course of the quarter, what we see is that
Chris Benecchi: prescribers are increasing and
Chris Benecchi: Repeat utilization of prescriptions are also increasing as physicians gain more experience with this medication.
Chris Benecchi: Obviously, that's enabled by the experience they have, the medication working as it did in our pivotal studies when they see it in the real-world setting, supported by the access and reimbursement ecosystem that we have that enables first-line access for this medication. So in effect, what we have happening here is a number of different commercialization factors coming together, enabling breadth and depth of utilization across that group of physicians.
Speaker Change: And we'll take our next question from Vikram Prirhant with Morgan Stanley.
Speaker Change: Hi, everyone. Thanks for taking our question. This is Morgan on for Vikram. So we have two. First,
Speaker Change: over what period of time in terms of months or quarters do you think it'll take to see this pull through? And then our second question is, do you think that the current Terzuve sales force is rightly sized or could there be any additional investments into the sales force in 2025? Thank you.
Speaker Change: Morgan, that was actually three questions. Way to get it in there. I'll start and I'll ask Chris to provide any comments. So just to back up.
Speaker Change: When we thought about the launch, we thought very big about the potential of PPD. We've said it a number of times. We see the blockbuster potential in Zerzube helping many, many women suffering with PPD.
Speaker Change: The epidemiology, the diagnosis rates, treatment rates support this, and we're already seeing tremendous use of Zerzuvia frontline by many of those healthcare providers educated. So we're off to a really strong start with a third full growth.
Speaker Change: The field force is calling on targets, some of whom have been called on, some of whom have not. Those called on, we should see immediate impact. Those newer ones might take one or two or three calls to see the impact, but we should be seeing some impact next quarter.
Speaker Change: And then, in terms of growth...
Speaker Change: We see growth quarter to quarter here for a pretty extended period of time. I can't really provide a forecast or guidance there, but again, based upon the numbers, you know, epidemiologically, half the women a year.
Speaker Change: suffer from from PPD. Less than half of those are diagnosed and less than half of those are treated.
Speaker Change: We're trying to change all of that. The number of treated with Zirzuve, the increased diagnosis, and the increased awareness. So we see this continue to grow for an extended period of time, quarter on quarter. As we see success, we might continue to invest in
Speaker Change: DTC, marketing, non-personal motion, including additional sales force expansion if it's warranted and will drive further success.
Speaker Change: What I would add, Barry, is that what we've learned very quickly is this is a promotionally responsive market. It's promotionally responsive to field force effort. It's promotionally responsive to non-personal efforts, which is why we're investing in both of these as we go forward. We want to certainly make sure that
Speaker Change: as there is opportunity that we're capitalizing on that opportunity right now. And I think you hit it. We'll continue to assess the investments required to grow the market as we move forward. But again, through promotional responsiveness and what we've learned, the time is right right now to be doing the things that we're doing.
Speaker Change: Thank you.
Speaker Change: Thanks, Morgan.
Speaker Change: And the next question will come from Yuri Ir with Mizuho.
Yuri Ir: Thanks for taking my questions.
Yuri Ir: Yeah, so first question is could you maybe elaborate a bit on coverage?
Speaker Change: particularly with, I guess, Medicaid reviews. I think in the last quarter you were saying that several large states
Speaker Change: were conducting reviews on just one ring.
Speaker Change: How much more coverage have you gotten from...
Speaker Change: Medicaid versus commercialized.
Speaker Change: And second question, would you give the number of prescriptions that were written in three cues? I might have missed it. I didn't see in the press release. Thanks.
Speaker Change: I'll start and then I'll ask Chris to comment. So last quarter we highlighted that we were going to provide shipments and revenues going forward and drop prescriptions so we've done that.
Speaker Change: In terms of coverage, I characterize coverage as
Speaker Change: way ahead of schedule in terms of where we are in the launch, both in terms of
Chris Benecchi: commercial PBM and Medicaid but Chris you want to provide more color? I mean it's a part of our strategy Barry what we historically said is that access and reimbursement is paramount to a successful launch which is why we've worked so hard on ensuring that in this area both with respect to commercial plans as well as Medicaid.
Chris Benecchi: What we've seen is that approximately 90% of all commercial Medicaid lives are now covered
Chris Benecchi: really the policies enabling first-line access to Zozube without burdensome prior authorizations.
Chris Benecchi: again it was a goal for us as we set out to launch this medication. I think with regard to Medicaid and the specificity of Medicaid, while we haven't given out the exact percentages of Medicaid, what we can say is the majority of Medicaid plans
Chris Benecchi: for which we've worked, there is a pathway to the utilization of Zerzube again in the sense of
Chris Benecchi: you know, no prior, no onerous prior authorizations and no step edits. So regardless of whether you're a commercially insured patient or you're someone with Medicaid,
Chris Benecchi: There's a high likelihood that not only are you able to get this medication, but you get it in the first line, and you're able to do so rather affordably. So, very encouraged by what we've seen so far. More work clearly to be done. And as I think the other thing that we said...
Chris Benecchi: earlier today is that we now have three of three national PBMs. So the win's in our sales from a market access perspective.
Speaker Change: Okay, thank you.
Speaker Change: And moving on to Danielle Brill.
Speaker Change: and now with Raymond James.
Speaker Change: Hey guys, this is Alex Hunter-Danielle. Thanks for taking the question.
Speaker Change: Question on Zerzube, just wondering how much insight you have into the Zerzube patient demographics. Just curious if you have any visibility whether Zerzube is being prescribed to mothers with a prior history of PPD or MDD for that matter and additionally curious whether you're able to see a breakdown of percent of patients prescribed Zerzube who are first-time mothers versus those having their second or third child for example. Thanks.
Speaker Change: Yeah, thanks for the question. Chris, do you want to start?
Chris: So what I would say about what we know about patients, we actually know quite a bit. The mix of patients that we see, some do have a prior history of major depressive disorder, and a significant group of the patient population has no prior history. They're new.
Chris: to the experience of postpartum depression.
Chris: But also say that across severity types, mild, moderate, or severe, we're seeing utilization of Zerzuviae without focus on any one of those particular areas. And I think...
Chris: What's really important about that is it says that clinicians aren't making a determination based upon, you know, severity from a scale. They're really assessing the needs of the mother when she presents in front of them with the signs and symptoms of PPD, while also taking into consideration prior history. So what we have effectively happening here is that mothers with PPD have access to this medication, as I said. They have access.
Chris: with Tuzer Zube as a first-line therapy in many cases which is really exciting because what it means is that there's the ability to fundamentally change the way PPD is not only thought about in terms of screening and diagnosis but the way it's ultimately treated.
Speaker Change: Yeah, just to round that out, I guess, to take the opposite side of that, Alex,
Speaker Change: We're not seeing, they're limited to prior history or not, or limited to severity. It's being used across all kinds of PPD, including new mothers or mothers with, as I said, their second or third or more children, which is great. That's the dynamic we want to see.
Speaker Change: That's very helpful. Thanks so much.
Speaker Change: Thanks, Alex.
Speaker Change: And the next question comes from Joel Beattie with Baird.
Joel Beattie: Hi, thanks. Maybe a follow-up to the last question is, how is the use of SIRS-2VAE in patients who are already on a treatment for depression? Is that a setting for growth? And do OB-GYNs feel comfortable describing there? Or is that more a setting who has ever been managing the depression?
Speaker Change: As the OBGYNs do and ACOG guides them to do, they need to screen and diagnose for PPD, so we're seeing that. And as we highlighted with the previous question,
Speaker Change: We're seeing moms being prescribed Zerzube with or without prior history, irrespective of the number, the child they had, and across all ranges of severity, mild, immediate, severe, which
Speaker Change: which we shouldn't be using anyway. We are also seeing Zerzuvia used as monotherapy on top of an antidepressant that a mom may have been on or reinitiated and concomitant use.
Speaker Change: What's really good here is that we're seeing the opportunity for growth across all segments. There's not one segment that's primed for growth. It's really across all these segments. Again, that's exactly what we want to see at this point in the launch.
Speaker Change: Thanks.
Speaker Change: Thanks, y'all.
Speaker Change: And we will go to Mark Goodman with Lyrinc.
Mark Goodman: Yes, two questions. One, Barry, on business development, are you looking outside at all for new products or should we be thinking internally developed and, you know, those products that we've talked about in the past that are preclinical and moving forward?
Mark Goodman: and that's how we should think about your pipeline. And then just the other question is, can you talk about the inventory change?
Mark Goodman: In the quarter, you were 5.5 weeks. Last quarter, where are you at the end of the third quarter and how much revenue did that eat into what you actually reported? Thanks.
Speaker Change: Hey Mark, thanks for the questions. I'll take the BD one and ask Chris to talk about inventory. So as we've highlighted, you know, we continue to be very intellectually curious.
Speaker Change: and to be frank anything we've liked that we might want to bring in others have really liked too and it's gone for pretty significant pieces of equity or cash so we'll continue to evaluate any potential opportunities that we believe support our business priorities and advance new therapeutic options
Speaker Change: for patience.
Speaker Change: including, you know, bringing business development in and bringing our pipeline forward. So we are open for opportunities there.
Speaker Change: Chris, you want to take the inventory piece?
Chris: So with respect to inventory today, we haven't commented on days on hand or weeks on hand.
Chris Benecchi: for the Revenue Impact of Inventory. But what we can say is that the strong revenue growth in Q3 was largely driven by an increase in demand.
Chris Benecchi: and that revenue from shipped units to PPD patients increased by approximately 40% in the third quarter. And our belief is that where we stand right now, inventory levels have largely normalized off of where they were from the initial build, and we're exactly where we should be as of the third full quarter.
Chris Benecchi: Thank you very much.
Chris Benecchi: Deadmark.
Speaker Change: No, I was going to say, didn't you say that your target was three to four weeks, or I think I heard that maybe last quarter, is that correct?
Mark Goodman: Yeah, so what I was going to say is, is the...
Mark Goodman: as the
Mark Goodman: As we continue to see double-digit growth quarter-to-quarter,
Speaker Change: The number of units and inventory will obviously grow because to cover three or four weeks at hand, you need a bigger number. So we'll continue to see inventory grow because demand continues to grow. That three to four week target you highlighted is something we've highlighted in the past. Again, that's a decision that wholesalers and specialty farmers will be making.
Mark Goodman: Thanks.
Speaker Change: Thank you.
Speaker Change: Thank you. And that will conclude the Q&A portion of today's call. With that, I will turn it back to Barry for closing remarks.
Barry Greene: Hey, thanks, Justin. And thanks again for all the questions and everyone for joining us this afternoon to review our results for the third quarter of 2024. I know I sent in a call, but I do want to take a moment to thank Kimi for her remarkable service to the company.
Barry Greene: Kimi's been instrumental in originating...
Barry Greene: Our Exceptional Culture, Balancing Top and Bottom Line.
Barry Greene: and really driving a grittiness and a fortitude that's part of the company now, really helping us to think about short, medium, and long-term value. So we wish Kimi the best and look forward to hearing about all her travels and adventures with Polly.
Barry Greene: In closing, we're encouraged by the strength of Zerzube's launch momentum as a treatment for women with PPD and deliberate in our plan to sustain growth through our commercialization efforts.
Barry Greene: We're also looking forward to sharing top-line data from the dementia study of Dalzin-Amdor and people with cognitive impairment associated with Huntington's disease anticipated before the end of the year.
Barry Greene: And finally, we're making strategic decisions intended to build for short, medium, and long-term value creation.
Barry Greene: Thanks again, everyone, and have a great day.
Speaker Change: Thank you. That does conclude today's conference. We do thank you for your participation. Have an excellent day.