Sage Restructuring Halves Staff, Turns Focus to Failed Depression Drug

Xconomy Boston — 

Sage Therapeutics is cutting workers who sell its only commercialized drug in a corporate reorganization that it says allows it to focus on clinical-stage compounds, including a depression treatment that failed a pivotal test late last year.

The corporate shakeup will eliminate the jobs of 340 employees, or about 53 percent of its staff, Sage (NASDAQ: SAGE) announced after the market close Tuesday. The Cambridge, MA-based company estimates that reducing its headcount and cutting expenses will save $170 million annually. Sage finished 2019 with $1 billion, according to its annual report. After the restructuring, the company says it expects it will have enough cash to last until 2022.

Most of those facing layoffs are sales staff for brexanalone (Zulresso), which last year became the first FDA-approved drug for post-partum depression (PPD). The treatment is a 60-hour infusion given continuously under medical supervision—dosing requirements that are challenging in today’s healthcare environment.

“Zulresso is a hospital-based treatment, so we are in competition for beds with COVID-19,” Mike Cloonan, Sage’s chief business officer, said on a conference call with analysts.

Patients are still receiving brexanalone, Cloonan continued. But Sage has seen some treatment sites pause those infusions in order to care for COVID-19 patients. The company will continue to sell brexanalone, focusing on geographic markets that have active treatment sites. Sage executives would not disclose on the call which regions have such sites.

Sage will now turn its attention to another depression drug, zuranolone. Last December, the company announced the investigational treatment failed a Phase 3 test in major depressive disorder (MDD). The pill was developed to offer a fast onset of therapeutic effect, to set it apart from other depression drugs that can take weeks before patients notice a difference. In addition to MDD, Sage hoped its pill could also become a more convenient option for patients needing treatment for PPD.

Last month, Sage announced that the FDA had provided guidance on a path that could lead to three different uses of zuranolone. Besides PPD, the drug could also find two different MDD applications. The first is treating patients who need a medicine to work quickly as they are beginning treatment with another antidepressant. The second is treatment of episodic MDD. Each of the three proposed uses of the drug requires a separate clinical trial.

The three zuranolone studies are all starting this year, with preliminary data expected in 2021. CEO Jeff Jonas said on the call that many of the clinical trial sites are already open and because these locations aren’t affiliated with hospitals, they’re less affected by COVID-19 disruptions. The clinical trial sites are also making use of telemedicine, he added. Those tests are in addition to another zuranolone study that was being conducted in parallel to the Phase 3 study that failed last year. Sage has amended that trial to add a group that will be given a higher dose of the drug.

Besides zuranalone, Sage has two other drugs in earlier stages of development. SAGE-324 is being readied to begin Phase 2 testing in essential tremor in the first half of this year; later this year SAGE-718 is expected to start Phase 2a testing in cognitive dysfunction.

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