Sage Anticipates Job Cuts and Project Scaling Down Following Zuranolone’s MDD Rejection

In response to the recent decision by the FDA to decline the Biogen-partnered drug zuranolone as a remedy for major depressive disorder (MDD), Sage Therapeutics is embarking on a series of measures aimed at reducing its workforce size and reevaluating its project pipeline. Nevertheless, the repercussions were not entirely negative for Sage, as the approval for treating postpartum depression (PPD) with zuranolone, now named Zurzuvae, brought a ray of positivity. This success also comes with a noteworthy financial gain, as Biogen has committed to providing a $75 million milestone payment to Sage upon the initial sale of Zurzuvae for PPD.

While the achievement in addressing PPD is worth celebrating, the more commercially promising prospect of utilizing zuranolone for MDD presented considerable challenges. The FDA’s comprehensive response letter conveyed the insufficiency of substantial evidence validating the drug’s efficacy for MDD treatment, necessitating further studies. Sage, in collaboration with Biogen, is in the process of scrutinizing the feedback provided by the FDA, aiming to formulate the most strategic way forward. These intentions were laid out in the comprehensive earnings report for the second quarter.

Barry Greene, the CEO of Sage, acknowledged the ripple effects of the MDD rejection on the company’s strategic plans. He emphasized the need to thoroughly assess resource allocation, focusing on projects that could bolster the company’s financial resilience. In the midst of these challenges, the anticipation of data readouts for SAGE-718, the foremost neuropsychiatric drug candidate designed for cognitive disorders, offers a silver lining, offering a distraction from the MDD setback. Other ventures like SAGE-324 for movement disorders, SAGE-689 addressing GABA-related conditions, and SAGE-319 targeting social interaction disorders are progressing at various stages of development.

While Sage’s financial reserves remain substantial, boasting a cash balance of $1 billion as of June, the upcoming modifications in workforce and project priorities are expected to lead to a reduction in operating expenses in the year 2024. Greene reiterated the company’s belief in zuranolone’s potential for MDD treatment but underscored the current emphasis on promoting Zurzuvae for PPD.

During conversations with analysts within the context of an earnings call, Greene reasserted Sage’s commitment to carefully evaluating the comprehensive response letter and charting a viable path forward for zuranolone within the MDD context. Kimi Iguchi, the Chief Financial Officer, underscored the pivotal role of the FDA’s feedback in influencing the company’s decisions related to resource allocation.

Zuranolone was specifically developed as a rapid-acting treatment regimen spanning 14 days, a departure from conventional depression therapies that require several weeks to exhibit effects. Nonetheless, investor apprehensions grew due to the uncertainty surrounding Biogen’s stance on zuranolone’s potential approval, a sentiment amplified by Biogen’s own cost-saving strategies. This raised questions about Biogen’s commitment to a substantial commercial launch of zuranolone.

Analysts from Mizuho underscored that MDD presented a far more substantial market opportunity than PPD, with projected sales reaching approximately $1.3 billion by 2030. Following the setback encountered in the phase 3 MOUNTAIN trial in 2019, Sage increased the dosage of zuranolone to successfully clear the subsequent WATERFALL study. However, the limited enhancement in treatment effects with escalated doses and the potential for increased sedation rates have cast doubt on the viability of conducting additional trials.

Sage Therapeutics is skillfully navigating the aftermath of zuranolone’s MDD rejection by the FDA, skillfully implementing organizational and project-based adaptations, all the while maintaining its unwavering focus on securing the successful approval of Zurzuvae for the treatment of postpartum depression.

The post Sage Anticipates Job Cuts and Project Scaling Down Following Zuranolone’s MDD Rejection appeared first on LifeSci Voice.