SAGE-319

Sage Therapeutics is reeling from another mid-stage setback as its investigational medicine dalzanemdor has missed the mark in a Phase 2 mild cognitive impairment trial. The drug, an NMDA receptor positive allosteric modulator, was not significantly better than placebo at helping Alzheimer’s patients with mild cognitive impairment or mild dementia improve on a scale known as the Wechsler Adult Intelligence Scale Fourth Edition Coding Test. Dalzanemdor had failed on the same primary endpoint in another Phase 2 in patients with Parkinson’s disease this spring. At the time, Sage executives tried downplaying any read-through from the Parkinson’s trial to the Alzheimer’s study. The 12-week trial, dubbed LIGHTWAVE, randomized 174 Alzheimer’s patients. With the primary endpoint miss, Sage said it is discontinuing further development of dalzanemdor, or SAGE-718, in Alzheimer’s. Sage’s share price $SAGE was down more than 12% before Tuesday’s opening bell. Next up is Huntington’s disease. The Cambridge, MA-based biotech said it anticipates reporting topline results from another Phase 2 of the investigational drug in patients with cognitive impairment associated with Huntington’s by the end of this year. The drugmaker said that is its lead indication for the medicine. “While we are disappointed by the results of the LIGHTWAVE Study, we are grateful to participants, investigators, care partners, patient advocates and the Alzheimer’s community who helped make this important research possible,” CEO Barry Greene said in a press release. “We hope our work and these findings help to inform future research.” It marks another blow to Sage’s pipeline. In July, the company and partner Biogen said their oral medicine SAGE-324 failed a Phase 2 in essential tremor . Biogen walked away from that piece of their pact two months later. Sage continues to evaluate whether SAGE-324 can be applied for other brain conditions. The duo secured an FDA green light for their drug Zurzuvae in postpartum depression last August, but it was rejected in the broader population of major depressive disorder. Sage is also evaluating a slate of other investigational medicines, including SAGE-689, SAGE-421 and SAGE-319.

Sage Therapeutics will also “pause certain earlier-stage programs, with the goal of making evidence-driven investments.” Sage Therapeutics will jettison 40% of its workforce as the company navigates a future for its Biogen-partnered drug after the therapy was rejected as a treatment for major depressive disorder (MDD). The company had already alluded to potential layoffs earlier in August when it revealed that the FDA had rejected the MDD approval application. The regulator did at least approve the drug, to be marketed as Zurzuvae, in the less financially lucrative indication of postpartum depression (PPD). It’s in PPD that Sage is now placing its bets, with CEO Barry Greene describing the biotech’s approach to Zurzuvae as “think big, start small and scale fast.” “Part of our efforts to become a leaner and stronger company means having to reorganize our workforce,” Greene added in the Thursday morning release. “Our business fundamentals are strong, we are well capitalized, and our goal is to put Sage in a solid position to optimize commercial execution and develop our pipeline with the goal of significant value creation.” It means that around 40% of the biotech’s employees will be heading for the exits. This major restructuring is “designed to right-size the organization as the company works to achieve sustained growth and allow for commercial hires to support the goal of a successful launch of Zurzuvae to treat women with PPD,” Sage said. The company will also “refine” its pipeline to advance its lead neuropsychiatric drug candidate SAGE-718. The NMDA receptor positive allosteric modulator is in development for various cognitive disorders including Huntington’s, Parkinson’s and Alzheimer’s diseases, with a slate of readouts lined up from next year. Sage also confirmed it will continue to work on SAGE-324, the biotech’s lead neurology program, which is in a phase 2 trial for essential tremor and being considered for other movement disorders like epilepsy and Parkinson’s. However, the company will “pause certain earlier-stage programs, with the goal of making evidence-driven investments,” it said. Sage didn’t go into further details, but the biotech's pipeline lists “additional clinical programs” as SAGE-319 for GABA hypofunction and SAGE-421 for NMDA hypofunction. The final major change outlined today by Sage was the move to “align its leadership team structure to scale with pipeline and commercial priorities.” The major C-suite shake-up will see long-standing Chief Scientific Officer Al Robichaud, Ph.D., leaving the leadership, along with Chief Development Officer Jim Doherty and Mark Pollack, senior vice president of medical affairs. Mike Quirk, currently SVP of discovery research, will step into the CSO role, with Chief Medical Officer Laura Gault, M.D., Ph.D., taking on Doherty’s responsibilities. Combined, the various pipeline, workforce and C-suite changes are expected to claw back annualized net savings of around $240 million, of which 60% will be related to R&D, Sage explained. The company is also still in line to pocket a $75 million milestone payment from Biogen once Zurzuvae notches its first sale for PPD. Sage ended June with around $1 billion in cash and equivalents, which it expects to keep the lights on into 2026.