Sage Therapeutics Inc. recently announced plans to reorganize its business operations and workforce, in preparation for the upcoming launch of its postpartum depression treatment, Zurzuvae, expected in late 2023. The strategic move includes a significant 40% reduction in the company's workforce, as well as a focused effort to advance SAGE-718 and SAGE-324, while temporarily pausing other earlier-stage programs.
Streamlining Leadership Team Structure
To better align with its pipeline and commercial goals, Sage Therapeutics will also restructure its leadership team. Al Robichaud, who has served as the company's Chief Scientific Officer since its inception in 2011, has decided to step down from his current role. However, Robichaud will continue to support the company as a consultant and as a member of its Medicinal Chemistry and Pre-Clinical Scientific Advisory Boards. Mike Quirk, currently the Senior Vice President of Discovery Research, will take over as the new Chief Scientific Officer.
Jim Doherty, a founding member of Sage and the Chief Development Officer, will also be leaving the company to pursue new opportunities.
Anticipated Financial Impact
Sage Therapeutics expects these strategic changes to result in net annualized savings of approximately $240 million. The majority of these savings, approximately 60%, are estimated to come from research and development (R&D) related expenses. The company also foresees a one-time charge of approximately $36 million to $38 million, primarily in the third quarter.
Additionally, Sage Therapeutics has the potential to earn a milestone payment of $75 million from Biogen upon the first commercial sale of Zurzuvae. As of June 30, the company had approximately $1.0 billion in cash reserves.
FDA Approval and Market Outlook
In early August, the U.S. Food and Drug Administration (FDA) granted approval for Sage Therapeutics' Zurzuvae treatment for postpartum depression. However, the FDA did not approve the treatment for major depressive disorder, despite its larger potential patient base.
Year to date, Sage Therapeutics' stock has experienced a 48% decline, while the broader market, represented by the S&P 500, has achieved a 17.6% gain.
Sage Therapeutics remains committed to its goal of addressing unmet needs in mental health and is taking strategic measures to ensure the successful launch of Zurzuvae.