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Description

/s/ Anne Marie Cook

Anne Marie Cook

Senior Vice President, General Counsel

ZULRESSO: The U.S. commercial launch of ZULRESSO commenced on June 24, 2019 following scheduling by the U.S. Drug Enforcement Administration (DEA) and finalization of the product label. ZULRESSO is administered in a healthcare setting certified under the ZULRESSO Risk Evaluation and Mitigation Strategy (REMS) program.

More than 100 healthcare facilities, including hospitals, infusion centers, wellness centers, and fertility centers are ZULRESSO REMS certified, covering 55 of the top 140 Metropolitan Statistical Areas in the U.S.

ZULRESSO REMS certification is one step in the process for sites of care to be treatment ready. Given the need to achieve formulary approval, establish protocols for administering ZULRESSO and secure satisfactory reimbursement, full activation of sites can take an estimated 6 to 9 months or more. Sage anticipates launch momentum to build in 4Q 2019 into 2020.

As of August 1, 2019, plans representing more than 65 percent of all covered lives have committed to favorable coverage with either light or no restrictions.

Plans covering approximately 30 percent of covered lives are still reviewing ZULRESSO, with decisions expected in the coming months. We expect these payers to cover ZULRESSO on a medical exception basis until a policy is in place.

Sage Central, Sage’s patient support center, officially opened in June and is providing a range of patient resources to assist women with PPD and their families, including: dedicated case managers who can provide information to help navigate the treatment journey; personalized support to assist with understanding insurance and coverage options; financial assistance programs for eligible patients; and access to educational resources and assistance through connections to more than 60 national and local advocacy groups.

SAGE-217: In July 2019, Sage announced clinical findings from an open-label Phase 2 clinical trial of SAGE-217 in bipolar depression (ARCHWAY Study), as well as analysis of datasets from previously completed clinical studies in MDD and PPD showing positive signals for potential development of SAGE-217 in generalized anxiety disorder and treatment-resistant depression (TRD). Sage plans to initiate a clinical study evaluating SAGE-217 in TRD. Timing for initiation of this study will be provided in 2H 2019.

ARCHWAY Study: Results from this open-label Phase 2 clinical trial evaluating the safety and activity of SAGE-217 in 35 adult men and women with moderate to severe bipolar I/II disorder with a major depressive episode demonstrated a rapid and durable response to treatment as measured by the Montgomery–Åsberg Depression Rating Scale (MADRS) and a statistically significant improvement compared to baseline at Day 15; the effect was maintained through the end of the follow-up period at Day 42. The most common adverse events (AEs) in the trial were somnolence, headache, diarrhea, and sedation. There were two cases of transient hypomania off-treatment; no mania or serious AEs were reported in the trial.

SAGE-217 in patients who did not respond to anti-depressant therapy at baseline: Results from a post-hoc analysis of 51 patients from the MDD-201B and ROBIN (PPD) studies with ongoing symptoms of depression despite receiving standard anti-depressant pharmacotherapy demonstrated a rapid response to treatment and

reduction in depressive symptoms in the SAGE-217-treated group compared to the placebo group which was durable over the follow-up period. The most common (>5%) AEs in the MDD-201B study were headache, dizziness, nausea, and somnolence; the most common (>5%) AEs in the ROBIN study were somnolence, headache, dizziness, upper respiratory tract infection, diarrhea, and sedation.

SAGE-217 in anxiety: Analysis evaluating response on the Hamilton Anxiety Rating Scale (HAM-A) in 89 patients from the MDD-201B study and 151 patients from the ROBIN (PPD) study demonstrated rapid onset of a clinically meaningful anxiolytic effect in the SAGE-217-treated group compared to the placebo group which was durable past initial treatment over the study period.

The SAGE-217 clinical program evaluating the potential of SAGE-217 as a short-course episodic, rapidly-acting oral treatment for MDD and PPD is progressing as expected. In addition to the two completed, positive pivotal studies, one in MDD and one in PPD, there are four additional ongoing or planned studies, including:

MOUNTAIN Study: Evaluating a dosing regimen of two weeks of 20mg or 30mg SAGE-217 treatment compared to placebo in patients with MDD, with four weeks of blinded follow-up. Top-line data from this pivotal study are expected in 4Q 2019 or 1Q 2020.

Retreatment studies: These studies are designed to provide longer-term retreatment and follow-up safety and tolerability data.

REDWOOD Study (MDD-302): Placebo-controlled pivotal trial to evaluate fixed interval SAGE-217 monotherapy maintenance treatment (without traditional antidepressants) for up to a year. The trial is expected to commence in 3Q 2019.

SHORELINE Study: Open-label pivotal trial evaluating SAGE-217 in treatment-free intervals and as-needed over the course of up to a year. Patients receive an initial two-week course of SAGE-217 therapy and are assessed every eight weeks for potential relapse of depressive symptoms. Top-line data are expected in 2020.

RAINFOREST Study: Phase 3 clinical trial evaluating two weeks of 30mg SAGE-217 treatment compared to placebo in patients with MDD and comorbid insomnia. Top-line data are expected in 2020.

SAGE-324: In July 2019, Sage announced results from Phase 1 single-ascending dose (SAD) and multiple-ascending dose (MAD) studies of SAGE-324 in healthy volunteers, as well as results from a Phase 1b single dose, open-label study of SAGE-324 in six patients with ET.

SAD and MAD studies: Results demonstrated a pharmacokinetic (PK) profile suitable for chronic dosing in indications amenable to the GABA PAM mechanism and a long half-life, an attribute well-suited for development in neurological conditions where stable plasma levels are a clinical challenge.

SAGE-324 in ET: Data demonstrated a reduction in tremor from baseline, with a maximum mean reduction in accelerometer upper limb total score of 48 percent. A clear pharmacokinetic/pharmacodynamic relationship was observed in plasma concentration over 24 hours. Sage plans to initiate a Phase 2 clinical study of SAGE-324 in essential tremor in 2H 2019.

SAGE-324 was generally well tolerated. The most common (>5%) AEs were feeling of relaxation, dizziness, and somnolence.

SAGE-718: In July 2019, results from five Phase 1 healthy volunteer studies, including SAD, MAD, and three target engagement biomarker studies demonstrated SAGE-718 was generally well-tolerated in the studies with a long half-life consistent with once-daily dosing. Additional results demonstrated SAGE-718 had effects on electrophysiological, functional neuroimaging, and cognitive measures consistent with CNS activity. Sage plans to evaluate SAGE-718 in Phase 2 clinical development programs in certain neurodegenerative disorders and other conditions where executive function is impaired. Timing for initiation of these studies will be provided in 2H 2019.

Top-line Data Readouts:

SAGE-718 Phase 1 cohort data in Huntington’s disease (2H 2019)

SAGE-217 MDD Phase 3 MOUNTAIN Study (4Q 2019/1Q 2020)

SAGE-217 MDD Phase 3 RAINFOREST and SHORELINE Studies (2020)

Clinical Trial Initiations:

Phase 2 placebo-controlled study with SAGE-324 in Essential Tremor (2H 2019)

Phase 3 REDWOOD (MDD-302) trial with SAGE-217 (3Q 2019)

Revenues: Sage recorded $0.9 million in revenues in the second quarter of 2019, compared to $90.0 million for the same period of 2018. Second quarter revenues in 2019 included $0.5 million of net revenues from sales of ZULRESSO, which consisted entirely of channel stocking in preparation for the U.S. commercial launch and $0.4 million in collaboration revenues from Shionogi & Co., Ltd. related to reimbursement of product expense. All revenues for the second quarter of 2018 were attributable to the $90.0 million upfront payment from Sage’s strategic collaboration with Shionogi & Co., Ltd.

Cash Position: Cash, cash equivalents, restricted cash, and marketable securities as of June 30, 2019 were approximately $1.2 billion, compared to $925.1 million at December 31, 2018. The increase was primarily due to proceeds from Sage’s follow-on public offering completed in February 2019.

R&D Expenses: Research and development expenses were $89.1 million, including $13.7 million of non-cash stock-based compensation expense, in the second quarter of 2019, compared to $69.0 million, including $12.1 million of non-cash stock-based compensation expense, for the same period of 2018. The increase in R&D expenses year-over-year was primarily due to advancement of the pivotal program for SAGE-217 in depression and continued research efforts across the Company’s early-stage clinical and discovery pipeline.

SG&A Expenses: Selling, general and administrative expenses were $88.2 million, including $21.1 million of non-cash stock-based compensation expense, in the second quarter of 2019, compared to $43.2 million, including $16.9 million of non-cash stock-based compensation expense, for the same period of 2018. The increase in SG&A expenses was primarily due to the increase in personnel-related expenses, professional fees to support expanding operations, costs related to the commercial launch of ZULRESSO, and facilities-related costs to support expanding operations.

Net Loss: Net loss was $168.2 million for the second quarter of 2019 compared to a net loss of $17.0 million, for the comparable period of 2018. The difference in net loss was driven by $90 million in revenue related to our Shionogi collaboration that we recorded in the second quarter of 2018.

Based on its current operating plan, Sage anticipates that its balance of cash, cash equivalents, restricted cash, and marketable securities will be at least $950 million at the end of 2019.

Sage expects that its operating expenses will increase year-over-year in 2019 to support continued pipeline advancement and commercialization of ZULRESSO in PPD.

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Excessive sedation and sudden loss of consciousness. ZULRESSO may cause you to feel very sleepy (excessive sedation) or pass out (loss of consciousness). Your healthcare provider should check you for symptoms of excessive sleepiness every 2 hours while you are awake.

During your ZULRESSO infusion, tell your healthcare provider right away if you feel like you cannot stay awake during the time you are normally awake or if you feel like you are going to pass out. Your healthcare provider may lower your dose or stop the infusion until symptoms go away.

You must have a caregiver or family member with you to help care for your child(ren) during your ZULRESSO infusion.

Because of the risk of serious harm resulting from excessive sedation or sudden loss of consciousness, ZULRESSO is only available through a restricted program called the ZULRESSO REMS.

drink alcohol

have kidney problems

are pregnant or think you may be pregnant. It is not known if ZULRESSO will harm your unborn baby.

There is a pregnancy registry for females who are exposed to ZULRESSO during pregnancy. The purpose of the registry is to collect information about the health of females exposed to ZULRESSO and their baby. If you become pregnant during treatment with ZULRESSO, talk to your healthcare provider about registering with the National Pregnancy Registry for Antidepressants at 1-844-405-6185 or visit https://womensmentalhealth.org/clinical-and-research-programs/pregnancyregistry/antidepressants/

are breastfeeding or plan to breastfeed. ZULRESSO passes into breast milk. Talk to your healthcare provider about the risks and benefits of breastfeeding and about the best way to feed your baby while receiving ZULRESSO.

ZULRESSO may make you feel dizzy and sleepy. Do not drive a car or do other dangerous activities after your ZULRESSO infusion until your feeling of sleepiness has completely gone away. See “What is the most important information I should know about ZULRESSO?”

Do not drink alcohol while receiving ZULRESSO.

See “What is the most important information I should know about ZULRESSO?”

Increased risk of suicidal thoughts or actions. ZULRESSO and other antidepressant medicines may increase suicidal thoughts and actions in some people 24 years of age and younger. Depression or other serious mental illnesses are the most important causes of suicidal thoughts or actions.

Pay close attention to any changes, especially sudden changes in mood, behavior, thoughts, or feelings, or if you develop suicidal thoughts or actions.

Tell your healthcare provider right away if you have any new or sudden changes in mood, behavior, thoughts, or feelings.

Keep all follow-up visits with your healthcare provider as scheduled. Call your healthcare provider between visits as needed, especially if you have concerns about symptoms.

Attempts to commit suicide, thoughts about suicide or dying, new or worse depression, other unusual changes in behavior or mood

Sleepiness, dry mouth, passing out, flushing of the skin or face.