Sage Therapeutics, Inc. (SAGE) Earnings Call Transcript & Summary

Good afternoon. Welcome to Sage Therapeutics conference call. [Operator Instructions] This call is being webcast live on the Investors & Media section of Sage's website at sagerx.com. This call is the property of Sage Therapeutics, and recording, reproduction or transmission of this call without the expressed written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded. I would now like to introduce Jeff Boyle, Investors Relations at Sage.

Hello, and thank you for joining to discuss Sage Therapeutics' corporate restructuring and ongoing development strategy. Before we begin, I would encourage everyone to go to the Investor & Media section of our website at investors.sagerx.com, where you can find the press release related to today's call. I would like to point out that we will be making forward-looking statements, which are based on our current expectations and beliefs. These statements are subject to certain risks and uncertainties, and our actual results may differ. Please consult the risk factors discussed in today's press release and our SEC filings for additional details. Today's call will feature prepared remarks by Dr. Jeff Jonas, our Chief Executive Officer. We will be joined for the Q&A session of the call by Mike Cloonan, our Chief Business Officer; and Kimi Iguchi, our Chief Financial Officer. Now I'll turn the call over to Jeff.

Thanks, Jeff, and thank you all for joining us this afternoon. I'll keep my remarks brief, so we can use this time to answer your questions. First, let me say that I hope all of you out there are doing well and start by acknowledging that this is a very difficult day for Sage. Making the decision to implement a workforce reduction is never easy, and we didn't come to this conclusion lightly, especially in the current environment. But it is a very prudent decision, one that we believe will enable Sage to continue advancing our development portfolio in a timely and efficient manner, consistent with our mission of delivering medicines that matter. And considering what we wanted to achieve, we recognized an important step was to reduce operating expenses as well as our workforce. The workforce will be reduced by approximately 53%, a reduction of approximately 340 positions, primarily affecting the ZULRESSO commercial operations and related SG&A support functions. Overall reductions are expected to result in an annualized cost savings of approximately $170 million. I want to pause here to personally thank all of the employees who are affected by this decision. Their contributions, dedication and commitment to always doing what's best for patients deserves our gratitude and appreciation. We wish only the best for these talented colleagues and, in many cases, friends, as they transition to new opportunities. And I also want to thank the employees who will now continue the journey here at Sage. Our strategy and mission remain the same, with the potential to help millions of patients with brain health disorders. Last month, we announced the planned path forward for zuranolone. We take a strategic approach to our resource allocation, and we now have a clearly defined development path, not only for zuranolone, but across all 3 of our brain health portfolios with a cash runway we expect to support operations into 2022. As outlined in the press release, this workforce reduction will primarily affect ZULRESSO commercial operations and related SG&A functions. While it was a difficult decision to reduce our investment in ZULRESSO, the expected annualized cost savings from ZULRESSO-related expenses are approximately $150 million. We remain committed to working with health care providers, sites of care and mothers seeking access to ZULRESSO. But our downsized commercial efforts will now focus on geographies that have existing and active treating sites. With this reduction in investment for ZULRESSO and given the uncertainty with the current environment for a hospital-based therapy, our previous revenue guidance is no longer valid, and we do not plan to provide revenue guidance for the balance of 2020. Mike will speak to this further during the Q&A. Moving forward, we remain focused on key strategic areas and supporting ongoing development activity across our depression, neurology and neuropsychiatry franchises. I won't review those milestones now. But suffice it to say that based on our continued assessments of our programs, we believe our milestone guidance for data readouts across the portfolio remain unchanged. As always, we will continue to assess macro factors and evaluate ways to sequence and potentially derisk our pipeline as appropriate throughout the year. I'll let Kimi answer any questions about the financial impact of the restructuring during the Q&A. But bottom line is that with these changes, we anticipate our cash on hand will support operations into 2022 and through upcoming key milestones. We also expect operating expenses in 2020 will be lower than the previous year, and we plan to provide more detail during our first quarter 2020 financial update in May. Before I open the call for Q&A, I'd like to remind everyone that we have an experienced team in place that will continue executing on our multi-franchise strategy in depression, neuropsychiatry and neurology. We believe our mission is even more important than ever, especially as mental health issues are coming to the forefront and will continue to have significant impact even after this current phase of the pandemic is over. And now I'll open the call for Q&A. Operator?

[Operator Instructions] Our first question comes from the line of Tazeen Ahmad from Bank of America.

Maybe, Jeff and team, can you talk about how you decided which of the, I guess, geographies, maybe, for ZULRESSO you want to keep promoting versus those that might have been sort of in play to become important later? And then I have a quick follow-up.

Yes. This is Jeff. And...

I can take it...

I was just looking to thank everybody quickly. Go ahead, Mike. I just wanted to say, I [indiscernible] give us a little dispensation, since we're all in different places. So we have -- so we apologize for that in advance. So Mike?

Yes. So the question on the treating sites. So we're not going to give details around the geographies and the number of sites at this point, right? But as Jeff said, our real focus now is we want to continue to be committed to ZULRESSO, the moms, the physicians and the sites that have been existing and active along the way. So we are focused on those sites now. The remaining spend that we'll have across ZULRESSO, we'll focus on those active and existing treating sites.

Okay. And then I think in the past, the view from the investment community was you would be gaining valuable time with physicians who would not only be prescribing ZULRESSO, but ultimately 217. How does that, if at all, come into play with your decision to do this workforce reduction? And how should we be thinking about, if there would be any impact to 217 when it does eventually launch in PPD in terms of how quick of a ramp we would expect in this scenario versus the one where your sales force would have had more time to establish these key relationships with physicians?

Yes. And I'll take it, again. It's Mike. So I think there's a couple things. One is we're still very much committed to the depression franchise. As Jeff said, we have 3 franchises. We're very focused on the depression franchise, and we still see this level of commitment with ZULRESSO will enable to help us take the lessons learned from this launch in PPD and apply some of those lessons to 217. But I think this really is about a prioritization process. We went through a very rigorous prioritization process. It was not easy to make these decisions, right? But we think this is going to put Sage in the best position in the short and midterm to continue to thrive and focus on all 3 of our franchises across the business. So this puts us in a position, as Jeff said, to extend our cash runway into 2022, beyond all the readouts that we have going forward. So a tough decision, but we think that we're confident and this well places us for the future.

Yes. I think there are a couple of other points I just want to add at the outset. One is, one of the hard parts about this decision is that from the patients we've gotten anecdotally from the field, the drug has performed very well, at least as well as we've seen in the clinical trials. So this has not been a -- it's been a tough decision. But with respect to 217, there are a couple of learnings that we've taken away from this: one, is that we see that the data that we've generated in the clinical trials was translatable into the field; and the second is that with respect to our work with payers and Mike's team, we saw that one of the values that payers really recognize was the ability to obtain rapid activity and separation from the drug in the early days of treatment. And of course, that fits -- that learning and that value proposition is one that we think zuranolone continues to maintain.

Our next question comes from the line of Marc Goodman from SVB Leerink.

First question is about the clinical studies. Across the industry, we're hearing about a lot of delays. And so I guess I'm curious why will there be no delays for you to enroll your patients in these 3 studies. And then I guess the second question is have there been any new patient starts for ZULRESSO in the past 2 weeks? I mean, could you just give us a sense, has there been -- has this just gone completely to 0 or are there still at least some women who are coming in?

I'll take the first, and then I'll refer it to Mike. So we've done a fair bit of work on these studies. Remember, a lot of these studies involve sites that have already been opened for the MOUNTAIN trial. So it's simply a matter of amending protocols, and many of our sites are not sites affiliated with hospitals. We're doing real-time assessments as we speak about patient enrollment. But we're spending a fair bit of time, and we already have using telemedicine, and many of these sites are already in start-up. And so what that means is we still have several months before we -- with respect to making the termination, but we know even at some of these start-up sites, we're already seeing substantial patient interest. Patients will need to be treated for depression. And really in the next few months, one of the points to make is that these types of studies may be one of the most available treatment options for patients with depression. So this is something we're assessing every day, literally. But right now, we're very comfortable across our portfolio that we'll be able to meet our time lines.

Yes. And I'll take the second question, the question about treating sites and what are we seeing around patients. So like everyone, we're -- this changes daily, right, with COVID-19 to see what's happening. As a reminder, ZULRESSO is a hospital-based treatment. So we are in competition for beds with COVID-19. And what I can say is, yes, patients continue to get treated, but we've also seen several sites pause infusing at this point as they work through the COVID situation.

Our next question comes from the line of Ritu Baral from Cowen.

Can you guys comment on if there's any R&D cuts at all? I know you mentioned that there would be $170 million in -- reduction in OpEx, $150 million of which are from ZULRESSO. So can you comment on where that delta of $20 million is coming from? And if any is coming from R&D? And then I've got a quick follow-up.

Yes, Ritu, thanks. It's Kimi. I'll take that one. So as you said, our estimated annualized savings is $170 million. So that includes both the workforce reduction and external dollars. $150 million of that is really related to SG&A. So mainly the commercial operations and the G&A infrastructure to support ZULRESSO. So that's about $150 million. The other $20 million is across R&D, and that's with regards to some workforce as well as looking at some external spend that we could hold off of.

Got it. And then just a little bit of housekeeping here. I've noticed on your release that the SHORELINE -- completion of SHORELINE is the only thing without a year and a date sort of next to it. To be clear, are you reiterating 2020 SHORELINE data? And can you also, within SHORELINE, is this something that you can complete with telemedicine on the primary endpoint?

Yes, this is Jeff. Firstly, 303 study, we plan to release data this year for that. And we already utilize telemedicine. It's one of the reasons that we've already developed that. We've -- it's one of the reasons we're comfortable that we'll be able to prioritize our key development milestones and move them forward. We do a lot of -- we've done distal monitoring, however. So yes, 303, we're still on target to report out this year, with the 30-milligram dose.

Thank you. Our next question comes from the line of Cory Kasimov from JPMorgan.

First of all, I wanted to follow up on SHORELINE. How quickly will you start the 50-milligram cohort there? And do you expect that we'll see data from that particular cohort before we see those other Phase III trials? And then I have one quick follow-up.

Yes. Today's -- we're trying to focus today on really what we've done as a company, Cory. I think it's probably premature to speculate when FPFV will be for the 50 milligram. It is on track to dose this year. And I think, just to reiterate, really, just to back up a moment, the purpose of what we're announcing today is really to let folks know that all of the -- the time lines that we've put out, we remain -- we believe remain on track, not only for zuranolone, but also for 324 and 214 and 718.

Okay. So the follow-up is with regard to today's news. My understanding is that the prior cash runway guidance was to get you into 2022, and that's something you're reiterating today. So I guess I'm curious how much do you see this restructuring extending that cash runway.

Cory, it's Kimi. I'll take that one. So look, here's what we've talked about, right? So our last reported cash balance was $1 billion at the end of 2019. We talked -- I just mentioned how this current restructuring has potential for cost savings of about $170 million, that's annualized cost savings. We've also said that our 2020 operating expenses are going to be lower than 2019. And lastly, we're not planning and we don't really require the need to access the capital markets in the near term, and that really is a result of this, and we're expected to be resourced to support operations into 2022.

Our next question comes from the line of Salveen Richter from Goldman Sachs.

This is Andrea on for Salveen. Maybe just following up on the last question, Kimi. Over how many years do you expect to recognize the cost savings?

So the estimate is annualized cost savings, so that's a net amount. So that really is partially the workforce reduction and partially external spend. So that it's -- you can think of that as an annualized number. I think, of course, as we go out, we have additional pipeline decisions we'll make -- those will be on top of that.

Our next question comes from the line of Akash Tewari from Wolfe Research.

So what's the cadence of the 3 new 217 study readouts? Will they all kind of read out in a similar time frame? Or could we perhaps see the team raise equity in between 1 of these 3 readouts? And additionally, what's the estimated cost individually of these 3 new 217 studies, along with the allocated spend for 324 and 718? If -- I have one more follow-up. Let me know, otherwise, I'm good with this.

I'll start, and I'll turn it over to Kimi. We haven't disclosed what the cadence is. As I've said, and I think in answer to -- what I said to Cory earlier, to be clear, these studies are all -- all of our studies are already in start-up. And so they are all moving along. A lot of this stuff we've already approached in terms of being able to utilize telemedicine. And I think, for me, that's the major takeaway for today is that this restructuring will allow us to continue with the important value-creating milestones that we think everyone is looking forward to. With respect to actual cadence, we -- it's too soon to say. All 3 studies are already, as I say, in start-up mode, and that, as you know, will always depend on enrollment rates and things of that nature. But -- and I'll turn over the rest to Kimi.

Yes. Thanks, Jeff. So again, I made the point about our cash balance, and we talked about the cash balance, the existing cash balance can support us and operations into 2022. We're confident about where we are. All I can tell you right now is that there are a lot of moving pieces, as you can see from the company and all of the things that we've been talking about. There's 3 franchise areas that we're supporting here. But at this point, we're not planning, nor do we require the need to go to the capital markets in the near term. Again, we expect that our cash balance can get us into 2022.

Our next question comes from the line of Paul Matteis from Stifel.

As it relates to cash burn, so Kimi, you said you ended last year with $1 billion in cash. And outside of any financings, you burned about $500 million last year. So I guess with that in mind, can you maybe just give us a little bit more color on how much less cash you might burn this year? I guess with that, really, what I'm trying to get at is do you think that ahead of this next set of data readouts, you hit or already or end up going below 12 months of cash? And that's kind of a proxy when investors think that a company may or may not need to think about financing.

Yes. Okay. Thanks, Paul. So again, I'll just point back to the cost reductions and the reallocation of resources that we're talking about today, we believe, will result in cost savings of approximately $170 million. So those are annualized savings, right? And again, we're -- this is happening now. So we won't have that full impact in 2020. Again, the other thing that we did talk about is that our 2019 operating expenses -- or our 2020 operating expenses will be lower than 2019. So those -- I think those are the couple of things I can provide to you. Again, when you think about a reduction in the workforce -- approximately 50% of the workforce being reduced, that has a tremendous impact, and a difficult decision for us to make.

Our next question comes from the line of Andrew Tsai from Jefferies.

Noticed in the press release, there were no mentions of REDWOOD or RAINFOREST. So just curious if there are any updates to those studies.

Yes. The 302 and the 304 study, both remain paused at this time, while we're focusing on the 3 new studies for zuranolone, the postpartum study, the rapid response study and the repeat placebo-controlled study at 50 milligrams. Those other studies, as I say, remain paused. And we're going to reevaluate timing for reinitiating those as we move forward.

Our next question comes from the line of Brian Abrahams from RBC Capital Markets.

I'm curious how much of this decision was based on unique challenges to ZULRESSO's administration versus maybe what you're seeing on the ground with respect to just overall headwinds building the PPD market and generating position and patient interest. And I'm also curious your openness to regional or even global partnerships for 217 to help further improve the capital cushion.

This is Jeff, first. I think there are a couple of points I want to make, and then I'm going to turn it to Mike and then to Kimi. We told you actually -- we told -- as we know, we all told you when we completed MOUNTAIN and then later that we would be updating you all on a resource allocation strategy and how we could efficiently look at our resourcing over time to achieve what we want to achieve as a company. And so this has been something that we've been considering since MOUNTAIN, as I think, we've discussed. I think it's fair to point out, and I think Mike is going to comment. I'll just let this go to Mike next. You're looking at -- with ZULRESSO, the difficult part has been that -- the feedback from the field has been very positive, but the reality is you have a drug that's requiring frequent checks with an intensity level of a hospital bed that right now has turned out to be a precious resource for people who are dying. So that's just a real-world factor. So -- but we have looked at the trajectory of ZULRESSO prior to this. So this is -- as I say, this is a decision that we made in order to make sure we utilize our resources most appropriately to basically take advantage of these clear development paths for zuranolone that the FDA has afforded us, plus continuing to support SAGE-324 and 718. So I'm going to turn this over now to Mike and then to Kimi.

Yes, Brian, I think I could take your both -- your other questions. I think just to build on what Jeff was saying. I think your question really is getting at, how do you think about ZULRESSO versus, say, 217 coming later in PPD. And the way we look at this is very different product profiles, right, for ZULRESSO versus zuranolone, with a REMS -- with ZULRESSO as just at a hospital-based product and at 60-hour infusion in a hospital as well, very different than zuranolone as an oral therapy, right, coming into the market. And I think what makes us confident about the PPD as a therapeutic area is the unmet need is significant. We've made a lot of traction, as Jeff said, with payers, physicians and patients, helping them from a disease education perspective, and how important it is to treat this disease rapidly, right? So and that plays out through demand, all right? We've been pleased with the demand metrics that we've had up until -- through Q4 when we presented that data. And so we look at that as it's not a function of the market itself. It's more product profile challenges that we've been very forthcoming, I think, with ZULRESSO over the course of the launch uptake. On the BD side. I'll answer the BD question that you had. So I think our strategy remains the same on BD really at this point. I think one important thing to note in Kimi's guidance that she mentioned, I think, cash runway into 2022, it does not require a business development deal having to be executed to hit that. And so our strategy really around BD has been, if we can find partners and collaborate, that's going to help us accelerate access for patients in markets or in indications or even expand our capabilities. Those are the partnerships that we're very interested in. Shionogi is a good example. That was a regional partnership, but we look at other opportunities to either expand geographies, indications, developments, and commercial capabilities are all things that we would consider from a BD perspective. So very similar to what we've spoken out in the past.

Our next question comes from the line of Dane Leone from Raymond James.

We're just getting asked for a bit more detail on the cuts as they're related to what aspects of the workforce. You guys said that it was pretty much 53% of the company that primarily is related to ZULRESSO commercialization. Is that -- are the savings -- the $170 million in savings related to ZULRESSO? Or is it actual like person -- maybe to get out -- like, can you just break down the workforce reduction? Like how many people are commercially dedicated to ZULRESSO versus like general back office support functions versus potentially like R&D function?

Thanks, Dane. It's Kimi. Let me take that question. Again, the $170 million of annualized cost savings that we spoke about includes both FTE costs, so that's the workforce reduction as well as external dollars. What we've said is that $150 million of that really relates to SG&A, which was really the commercial operations supporting ZULRESSO and some of the support functions within the G&A function. So that's the amount of -- that's the level of detail we're giving. And obviously, the remainder $20 million relates to research and development. So I hope that answers your question.

Our next question comes from the line of Neena Bitritto-Garg from Citi.

So I'm just going to piggyback on the last question. So I think to ask that question a little bit more directly. Of the 340 cuts, how many of those are actually field-based employees that are promoting ZULRESSO or MSLs?

Yes, this is Jeff. We're not disclosing the actual distribution of cuts. And we -- the basic takeaway message here is that, with this restructuring, the 2 takeaways is we're not going to be providing further financial guidance with ZULRESSO. We are going to support the sites where that are active. And obviously, that information is proprietary. And the other piece is, we are comfortable that -- with the reduced workforce and the reduced spend that we will be able to execute our major development time lines and value-creating catalysts in 2020 and 2021 on time.

Our next question comes from the line of Yatin Suneja from Guggenheim Partners.

Two questions. The first one is, could you maybe talk about the importance of SHORELINE, given that this is going to be an open-label study. And we know that placebo responses in neuropsychiatry trials could be variable. So just trying to understand what we should be looking for in SHORELINE and what we should be comparing it with. The second I have is, could you file in PPD if the acute MDD trial work based on just the ROBIN and the second MDD study? Basically, do you have to wait for the second successful PPD before you can file in PPD alone?

I'll take them in reverse order. Right now, there are 3 independent pathways for filing that we're describing. One is -- the one, the episodic which requires one additional acute study, plus probably data from a follow-up study. And we could talk -- and I'll mention this in a minute. The other 2 are independent. So each one is an independent shot on goal. So one more postpartum study allows us to file with postpartum without follow-up and one additional rapid response treatment study allows us to file with that without follow-up. And so basically, you have 3 shots on goal with 3 independent studies. I think at this point, we can't speculate on other combinations and sequencing, and that's something that will happen as these studies read out. The SHORELINE study or the 303 study is right now the largest naturalistic study of its kind with an NCE in depression. So we -- it's the type of real-world study that people have asked for over the years and especially from a regulatory requirement. Now remember, the SHORELINE study is not as much goal -- is not -- we'll look at initial response. But the critical piece of the SHORELINE study is looking at retreatment and how many patients remain stable at the initial course of drug. We think this is going to be very informative about the utility of zuranolone in treating depression and demonstrative of whether this can offer a completely unique treatment opportunity for patients. If you take a look at our earlier studies, we're pretty comfortable that the patients who respond after -- remain stable after the drugs are withdrawn, and we think that is potentially a unique differentiator for zuranolone versus other types of novel mechanisms. So we think the 303 study will be uniquely variable -- valuable in the field.

Our next question comes from the line of Laura Chico from Wedbush Securities.

I just had 2. So first, with regards to the restructuring and the financial guidance. I think the release did mention that you're going to be providing additional guidance at the early May earnings report. I guess I'm just curious, what remaining data points are most important for you to consider between now and then, given that we're almost towards the midpoint of April. And then my second question, I know there's been a lot of questions regarding enrollment in the zuranolone trials. I guess I'm more focused on the impact to heterogeneity of the data. And you've implemented a lot of telemedicine visits. But obviously, these are challenging times across the mental health space. So I'm just kind of curious what steps you're taking to mitigate data heterogeneity in these upcoming studies.

Sure. So Laura, why don't I start? We did say that we were going to provide additional guidance in our earnings call in May. As you can imagine, a lot goes into the thought process around restructuring. We're confident about the decisions that we've made, and this is -- a lot has gone on here. So we do have a clearly defined path forward. We have the runway to support operations into 2022, but there are things that we want to button up, and that we'll be able to talk to you in May on our earnings call.

Yes. With respect to data heterogeneity, I think you got to -- I think there are a few points to make. First, FDA has already issued guidance about telemedicine with respect to ongoing studies. And I think it's beyond the scope today to discuss that, but there's been -- guidance has already been issued about how to implement telemedicine. We're fortunate because we've already done this. The other point to remember is that, if you look at rating scales across medicine, one of the major -- one of the only advantages psychiatry has is that we have extremely well-validated scales. So we can easily establish inter-rater reliability, both with telemedicine, with distal training and on-site training with both HAM-Ds and MADRS. One of the things we've always done as a company is to -- is leveraging our learnings. We know how CAP has worked. That's never been an issue for us, and we've always continued to utilize scales with which clinicians are familiar. They're not new scales. So the HAM-D, the MADRS, the CGI, scales of that nature are the bread and butter of psychiatry. So CAP is -- with those sorts of scales have always been very, very reliable.

Our next question comes from the line of Tim Lugo from William Blair.

This is Lachlan on for Tim. I guess, first of all, I just wanted to clarify in terms of the ZULRESSO sites, and apologies if I missed this earlier, but for those that are sort of partway through activating and coming online, will they continue to be supported? Or is it only those that have actually prescribed and treated patients? And second of all, given all the events and updates to the 217 program over the past few months, could you just talk about your interest in TRD? That -- is that still something that's on the cards for the future? And how are you thinking about 217 in that indication going forward?

Lachlan, it's Mike, and then I'll pass it over to Jeff for the 217 question. So on the sites. Yes, We did talk about this. There was a question that came up before. We're not talking specifically about the numbers and the geographies of the sites. But what we've said is our focus with the resourcing that we have on ZULRESSO now is going to be really focused on the existing active treating sites. And so that's really what our strategy has been based around going forward. We want to continue to remain committed to the moms, the physicians, the sites that have engaged with ZULRESSO, and that's where our focus will be. And I'll turn it over to Jeff for the 217 question.

Yes. Thanks for the question. We're really going to focus today -- in the near term on the 3 major studies we've already described because we think they offer the most rapid approach towards potential NDA filing. TRD has always been of interest to us. And I think if you've looked at our data, and I think you have, one of the interesting findings for ZULRESSO has been -- zuranolone, I'm sorry, has been that as you increase the HAM-D cutoffs, we actually see bigger effect sizes. So that's always been the appeal of TRD. But I think from a regulatory standpoint, our belief is that our best approach for rapid entry into the marketplace is with the current program that we outlined.

Our next question comes from the line of Sumant Kulkarni from Canaccord.

I have 2. I'll ask both of them upfront. So given zuranolone has breakthrough and fast track designation specifically for MDD, why would that indication that affects significantly more patients not be a dedicated focus in terms of your filing strategy? And secondly, in these days of telemedicine and given the state of the world right now, what are the logistics of ensuring compliance in terms of dosing in a trial?

So with respect to the strategy, I think we've articulated this already. Because we only need one more study, we feel like the most proper way to derisk this was to go forward with the strategy we articulated. We have 2 reasonably large potential indications that require only one additional study without follow-up. MDD will always -- will have to have some follow-up. So as a result, we believe that the postpartum and the RRT have the potential to reach patients more rapidly. So that's simply a strategic decision. With respect to compliance, I think you have to back up and remember that as we've looked at the 301 data, in particular, the MOUNTAIN data, one of the learnings was that 30 milligrams, while we think was active, looked to be a minimal effective dose rather than a maximally effective dose. So we're comfortable with the 30 milligrams as a dose. When you go at a dose at that level, it becomes sensitive to all sorts of perturbations. And that's what you saw in the 301 study. So we're comfortable based on our population PK data based on this formulation that we have room to go up. And if you think about how that works, what that does is remove the variability that may drive patients below the response threshold. So inasmuch as population PK data, exposure data, exposure response data can help work on development programs, and this is sort of development 101, we think that a lot of the sensitivities in MOUNTAIN will be avoided by simply administering a higher dose.

Our next question comes from the line of Jay Olson from Oppenheimer.

I'm curious, as you look at your long-range plan, does this restructuring initiative that you're making today sort of permanently deprioritize ZULRESSO? Or do you envision some point in the future where both ZULRESSO and zuranolone will be able to synergistically coexist in the PPD marketplace?

Yes, Mike here. I'll take that question. So I think at this point in time, what we've talked about is we did a significant resource allocation and strategy that we looked at what made the most sense for the company to continue to fund the zuranolone studies in the pipeline and how we can continue to support ZULRESSO in the short term. And that's the news of the day, right, that we have $170 million of savings, $150 million of that related to SG&A and ZULRESSO. I think as we play this out, we have always said we think there's a spot for both products in the marketplace, right? Having options for patients has always been what we believe in, and we continue to do that, right? So we will continue to invest in ZULRESSO, and we'll continue to prosecute the trials for 217 and zuranolone. And we think if we, if we're fortunate, have both products there, we think choices for patients are a good thing. And that will continue to be the focus. We'll continue to invest in ZULRESSO.

At this time, I'm showing no further questions. I would like to turn the call back over to Jeff Jonas for closing remarks.

Listen, thanks, everybody, again, for joining us today. And we're looking forward to our ongoing products throughout the year. And hopefully, we'll be able to talk soon. So again, thanks, everybody. And I hope everyone is healthy, and stay well.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.