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

Good morning. Welcome to Sage Therapeutics' Sage Science Spotlight Webcast and Conference Call. [Operator Instructions] This call is being webcast live on the Investors and 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 express written consent of Sage Therapeutics is strictly prohibited. Please note that this call is being recorded. I would now like to introduce Jeff Boyle, Vice President of Investor Relations at Sage.

Good morning, and thank you for joining Sage Therapeutics' first Scientific Spotlight, an in-depth review of SAGE-718. Before we begin, I encourage everyone to go to the investor and media section of our website at sagerx.com, where you can find the slides that we will discuss. I'd like to point out that we'll 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 materially. Please consult the risk factors discussed in our SEC filings for additional details. We'll begin the call with prepared remarks first by Dr. Jim Doherty, our Chief Research Officer, who will provide background on Sage's translational science approach. Then Dr. Mike Quirk, Vice President, Pharmacology and Project Lead of the SAGE-718 program, will focus on Sage's approach to targeting NMDA receptors. And finally, Dr. Aaron Koenig, Executive Medical Director of the early development and Medical Lead of the SAGE-718 program, will discuss the role of cognitive function in our findings with SAGE-718 today. We will then open the call for Q&A. Please limit your questions to Sage's NMDA receptor modulator platform or SAGE-718. While we're looking forward to topline data from the WATERFALL program, which remains on track to read out by the end of the first half of this year, we're not taking questions about our other programs today. And now I'll turn the call over to Jim. Jim?

Thanks, Jeff. I'm excited to launch Sage's first ever Scientific Spotlight (sic) [ Science Spotlight ]. We plan to do a series of Spotlights as a complement to our annual FutureCast R&D event. Today, we'll take a more in-depth look at our NMDA receptor modulator platform with a particular focus on SAGE-718, our most advanced NMDA positive allosteric modulator and lead drug candidate for our neuropsychiatric franchise. A critical aspect of drug development is matching the right drug at the right dose to the right patient. Effective translational science is key to improving the probability of success in drug development across all therapeutic areas, but this process has been a challenge in neuroscience and requires new solutions. As we've demonstrated thus far with ZULRESSO, zuranolone and SAGE-324, we believe our approach to transitional science is a key differentiator, and it's fundamental to improving chances of success. We follow the science with our discovery efforts and lead with human data, while looking for big effect sizes to address unmet needs for patients who need new approaches. And this approach is what we've done with SAGE-718. 718 is particularly exciting as it is a first-in-class developmental program with a unique profile to date unlike any other investigative products we've seen. And while we thought about translation for SAGE-718 in a similar way to our GABA A receptor modulator programs, the biomarkers chosen for this program were, of course, chosen specifically to measure modulation of NMDA receptor function. There's great need for new drugs to address dementia and other cognitive impairments for people with difficult-to-treat neurodegenerative disorders like Huntington's, Parkinson's and Alzheimer's disease. If successful, SAGE-718 has the potential to help people with cognitive impairments, maintain independence longer and live fuller lives. And now I'll turn it over to Mike, who will walk you through our vision for our NMDA programs and for SAGE-718. Mike?

Thanks, Jim. Today, we will be discussing SAGE-718, the lead program in Sage's neuropsychiatry portfolio. SAGE-718 is being evaluated for its potential to treat cognitive impairment across a range of neurological and psychiatric conditions. Let's start by answering the question: what is cognition? Simply stated, cognition can be defined as the sum of all our mental abilities. Conceptually, cognition can be separated into different domains, such as executive function, attention and learning and memory. Today, we will be discussing the potential of SAGE-718 to treat a unique collection of cognitive deficits that are fundamental to day-to-day functioning. It is difficult to overstate the importance of cognition in our daily lives. Cognitive impairment is one of the greatest areas of unmet medical need and the burden is only growing. People with cognitive impairment report significant deficits in organization, multitasking and planning. Of course, current treatment options are limited. Consequently, individual's ability to work and live independently is compromised. Further, severe cognitive impairment causes suffering, not only for the patient, but their caregivers and society. NMDA receptors have long been recognized as a potential target for treating cognitive impairment. They constitute one of the major classes of excitatory receptors in the brain and play a fundamental role in regulating brain function and neuroplasticity. In fact, NMDA receptors enable brain circuits to combine and link related pieces of information, a feature that is critical for forming memories and enabling effective decision-making. More than 40 years of scientific research has implicated NMDA receptor dysfunction in a multitude of diseases. However, despite the recognized importance of NMDA receptors, traditional drug approaches have run the risk of causing severe side effects associated with either excessive stimulation or complete blockade of activity. At Sage, we believe that the best approach to modulating NMDA receptors is to leverage the brain's endogenous modulatory machinery. Compelling research shows that a specific brain metabolite, 24S-hydroxycholesterol, modulates NMDA receptors. Driven by this novel insight, we have created a portfolio of novel, wholly owned investigational products targeting NMDA receptors. With these investigational products, we are focused on dialing-in the degree of modulation, with compounds ranging the gamut from strong positive modulators to full negative modulators. Importantly, we believe that using the brain's endogenous chemistry as a starting point to inform our novel design decisions may enable us to reduce the potential for severe consequences, consequences that can be associated with either excessive stimulation or complete blockade of these critical receptors. SAGE-718 is the lead program in our NMDA portfolio. SAGE-718, a potent positive allosteric modulator, or PAM, has been extensively characterized both preclinically and clinically. Importantly, SAGE-718 exhibits robust effects in models where we have induced NMDA receptor impairment via a variety of distinct pathological mechanisms. Previously, we have discussed a series of translational medicine studies conducted with SAGE-718 in healthy volunteers. These studies utilize an array of biomarkers including electrophysiological recordings, functional brain imaging and cognitive testing. Together, these studies demonstrate that SAGE-718 can modulate human brain circuits critical to cognition. This demonstration of clinical activity has been crucial in our decision to advance SAGE-718 further into clinical development and provides the translational science foundation for additional drug programs within the NMDA portfolio. Given the role NMDA receptors may play in cognition, the number of potential indications for SAGE-718 is large. Applying Sage's research philosophy of following the science and leading with human data, we are utilizing a disciplined approach to SAGE-718's clinical development. Our approach combines discrete hypothesis testing in well-identified patient groups with a series of open-label trials in diverse indications. These studies allow clinical data and insights to inform how we expand the program. To give an example of one indication where we are pursuing a specific therapeutic hypothesis, consider our recently announced lead indication, cognitive impairment associated with early Huntington's Disease, or HD. HD is a genetic disorder that has broad neurodegenerative effects. From birth, we believe that HD patients are placed on a trajectory in which the loss of 24S-hydroxycholesterol contributes to a dramatic loss in cognitive abilities, a loss that becomes manifest during the prime years of life. Given that SAGE-718 was designed in part to target the 24S-hydroxycholesterol site on the NMDA receptor, we believe HD presents a compelling opportunity for SAGE-718 and provides an important potential proof point for other indications where diverse pathological mechanisms lead to NMDA receptor dysfunction. I will now turn the call over to Aaron to discuss our clinical approach to HD and other patient populations in more detail. Aaron?

Thanks, Mike. Now let's focus more closely on our work with SAGE-718, the unmet need that we're working to address and how the preclinical and translational story that Mike outlined has led to some promising clinical filings. To get us started, we're fortunate to be joined by 2 members of the HD community. First, I'll be speaking with Dr. Sam Frank, a neurologist who specializes in movement disorders and is also Director of the Huntington's Disease Society of America, Center of Excellence at Beth Israel Deaconess Medical Center. Then I'll speak with Seth Rotberg, a Huntington's patient advocate. Seth and his family have been personally affected by HD. His mother lived with Huntington's. And Seth is gene positive, but still asymptomatic. Seth's insights into the unmet needs of patients with Huntington's are important to highlight as we embark on the clinical development of SAGE-718.

Dr. Frank, thank you again for taking time to chat with us. Just to start out, could you give us sort of a primer on what Huntington's disease is?

Of course, Huntington's disease is a genetic disorder that impacts the brain. It is autosomal dominant, so it impacts every generation. You need only 1 copy of the gene in order to get expression of the disease. And the gene is actually one that's in everybody, and there is one section of that gene where there's too many copies or repeats of a particular section. And so the protein doesn't fold right and it causes problems, predominantly in the brain, but in other systems as well. And so it's a neurodegenerative disease that ultimately leads to death. It typically impacts people in their 30s and 40s, but it can be a juvenile onset, and it can be a geriatric onset in terms of the disease. It's a wide range. And people typically live on average about 20 years with the disease. It can be shorter on some populations, it can be longer in others.

So you mentioned that it is a genetic disease. Can you tell us a little bit about the impact of that on patients and the whole family unit?

It is a devastating cycle. And you're right, they will see not just their parent but aunts, uncles, cousins. So sometimes when there are multiple family members that are impacted, they can really see what might be coming for them. On the other hand, there are families that don't communicate, that don't get together because they're embarrassed about coming out in public, even for family events. And so families get more isolated. And this is a disease that isolates people and families, sometimes from their own family members. So we really see both ends of that spectrum.

How does cognition affect patients with Huntington's disease?

Very substantially, as you might imagine, even though the motor side is what we can see outwardly and is the most obvious sign, that's not why people wind up going on disability or giving up some of the functioning in terms of managing their finances or working. It's very much the cognitive side of Huntington's disease that can show -- can be one of the earliest signs of the disease and certainly can be one of the earliest signs that impairs functioning for patients. If I'm going to cook and someone tells me, "make a -- make some pasta." If I have Huntington's disease, someone has to break that down into individual steps, not because I can't do it from a motor perspective, but because I can't remember or I can't plan things out in terms of what it takes to get a pot out, fill it up with water, put a little salt in it, turn it on the stove, wait till it boils, put the pasta in. All these aspects of really simple tasks where we think of them as simple, has multiple steps. And so people wind up getting incapacitated and doing nothing.

When you provided that example, it sounds like a lot of the types of things that many folks take for granted on a daily basis that feel rather ordinary or that you can do while multitasking. These become big burdens for these patients and it sounds like real limiting factors in their lives?

That's true. And multitasking is not easy for all of us. And then you throw some cognitive issues and it becomes near impossible. And it's simplest tasks. I tell people, if you're going to be eating, yes, it's a motor task, but they have to be able to focus on eating because it takes a lot to cut the food, to get the right amount into their mouth, to be conscious of what's in their mouth already to chew it and swallow and then plan for the next bite.

Could you give me an example of what a good benefit would look like? What is something that a patient who's in their 40s, 50s with cognitive deficits, they are on a drug, what would a measure of success look like to you?

Measure of success is going to be, of course, improved function. And our measures of function right now are pretty gross. If you look at the main way that we measure Huntington's disease, it's with the functional capacity scale. I think we want people to be able to function better in their everyday life. Can they button that shirt? Can they put on their favorite pair of shoes? Can they cut their food themselves? And so those are some of the motor side of things, but it takes a cognitive aspect to do that.

Well, thank you so much for taking time to speak with us today. I know that this is disease in a patient population, you really committed your career to, and we are certainly interested in understanding how we can help move the bar in terms of available treatment options in the future.

Well, thank you for having me today, and good luck for -- on behalf of the entire HD community. We hope you're successful.

I'm fortunate to be joined now by Seth Rotberg, an HD patient advocate who has witnessed firsthand the reality of living with Huntington's disease. Seth, thanks so much for joining and for sharing your story with us today.

Yes. And I'll thank you for having me here today, excited to be here and help share a little bit more about my story.

Well, I was wondering if you could start by telling us about the impact that Huntington's has had on you and your family.

Yes, absolutely. So like most families, there is a misdiagnosis at first. My mom started with these wobbly movements, I guess you could say drunk-like movements, slurred speech, but then there was also these mood swings, kind of like bipolar disorder, some depression, where one minute, her and I are having a normal conversation and then the next, she's like frustrated or mad or just simply depressed. And the doctors labeled it for quite some time for her having bipolar disorder and major depression, but it didn't really explain those drunk-like movements, the motor symptoms. And so in order for us to actually find out about it, we had to have my mom go through a bunch of different tests and evaluations. And that's how we discovered that she was the first in our family to be diagnosed with Huntington's disease. It was not just those motor symptoms, but the cognition piece, the psychiatric piece, where she kind of lost the motivation to do much. She had that memory loss, lack of concentration. It just -- it definitely impacted her holistically, and I think that was just tough to watch over the years.

When you think about your own journey and as you mentioned, your risk of inheriting it, what do you think about or worry about most?

So now knowing that I tested positive for it, actually at the age of 20, I think there's a couple of things that kind of come to mind for me that I worry about. I think one of the biggest things is, again, watching my mom go through it, both physically and mentally and saying that could be me one day, is challenging.

Some people think the cognitive piece is really tied to your ability to maintain independence. And I was wondering if you agree with that or even what independence means to you in the context of living with a disease like this?

So with being cognitively aware, right, for example, driving, right? Like it might be, again, little to some people, but having the ability to just take the car out, go for a drive or go to the store, right, and not being able to do that because your cognitive abilities aren't up to par, it's tough. I do think the cognitive piece does go hand-in-hand with the feeling that independency. And unfortunately, with HD, you kind of -- I feel you kind of lose that independence and you go from like being an adult kind of slowly back to a child in some sense.

Well, it sounds to me like it's not just the quantity, but it's really the quality of those years that sound like they'd be important. What are some things that you wish we could do better in terms of treatments, whether it's the cognitive piece or the behavioral piece?

I think quality of life is huge, and I think we need to understand that from the community side of things, the patient perspective side of things of just realizing that, it's about the little things in life, right? Like maybe not as many mood swings or having that motivation to go out or being able to just do those little activities with friends and family, and it makes such a difference for people. And when I think of Huntington's disease, I don't just think of it as the motor symptoms. I mean, we know it was once called Huntington's chorea because of the motor symptoms, but then we realize that there's the cognitive and behavioral piece of it. I think we need to continue looking at it holistically because personally, for me, I would rather deal with motor symptoms. I'd rather have something that's going to help me with my cognitive and behavioral pieces of Huntington's disease because that's something that can really help with my, at least, quality of life of being able to maintain that cognitive ability, not have those, again, those mood swings or anything else that comes with the behavioral side of things as well.

What's one thing that you want people listening today to take away from this conversation or to remember about HD?

I think it's understanding the urgency of it, right? And just understanding that I don't have time just to wait around. I don't have time just to wait for the next treatment option to come when I'm already diagnosed, right? Like we learned so much with HD that it does impact cognitive and psychiatric symptoms well in advance.

Well, thank you so much for taking time to speak with us and sharing a very personal story. There are a lot of important messages that I heard, but I think just the call to action, the need for us to continue to research this disease, to develop new treatments and not just affect the quantity, but also the quality of life and the journey along the way.

I appreciate being here. And again, I think you're absolutely right, it's that quality of life and understanding what does that mean, right? For me, it's being able to still drive, right? Like -- or still have that independency or going to the grocery store and knowing what I'm shopping for, so I think we just need to continue to bring in that patient perspective. We need to continue to understand these unmet needs of how HD impacts people cognitively. I think we need to start acting now and start trying to find treatment options that help improve HD holistically.

I hope these conversations helped you learn a bit about HD, and in particular, the role that cognitive symptoms play early in the disease. For me, they are also an important reminder of the human toll of the disease and the reason that we at Sage are so committed to the development of treatments that have the potential to meaningfully improve patient lives. Mike, Seth and Dr. Frank each talked about cognition, which is defined as the sum of our mental abilities. Cognition can be broken down into different parts or domains, and here, we've highlighted the key domains as they're defined in the DSM 5. While you need all of these domains working together to function normally, it's really executive functioning that is the conductor of the cognitive orchestra. Executive functioning is what controls our ability to plan, make decisions, confront challenges and navigate unfamiliar situations. To measure cognition, we ask patients to complete tests, such as the iPad-based Spatial Working Memory task shown here. The test starts by showing the patient a group of orange boxes on the screen. The patient is asked to find yellow objects hidden under the boxes and as the number of boxes increases, the difficulty of the test increases as well. Ultimately, with this test, we're asking how well can you develop and use a strategy to find hidden information. When the test is very simple, such as in the 4 box condition, you'll see that there isn't a difference in performance between healthy individuals and those with HD. But as the test gets more difficult, up to 8 boxes, a difference in performance between healthy and HD subjects emerges. And it is here that we see the impact of impaired executive functioning in patients with HD, that ability to plan and strategize, which are the skills required to complete this task with the fewest number of errors. Executive functioning touches on so many aspects of what we do out in the real world, things like preparing meals, drive, even get dressed in the morning. Without executive functioning, it becomes really hard to operate independently. And when you think about the life stage of patients with early HD, adults in their 30s and 40s, working, perhaps raising a family, you can imagine that these executive problems can have very serious consequences. So how are we going about finding a solution? The first step in our early development journey at Sage is leveraging biomarker data, which we've done in HD with our lead NMDA PAM, SAGE-718. SAGE-718 is a novel synthetic neurosteroid that shares a similar molecular pharmacology profile with the naturally occurring molecule 24S-hydroxycholesterol, which itself is an endogenous modulator of the NMDA receptor. 24S-hydroxycholesterol levels, as shown here, decline early in the course of HD. Using data from the naturalistic follow-up TRACK-HD study in a collaboration with the CHDI Foundation, we correlated 24S levels with measures of cognitive and motor performance in patients with Huntington's. And we found the 24S levels correlated with cognitive performance and in particular, executive performance as measured by tests like the Stroop and symbol digit, but notably did not track with other aspects of the disease, including motor symptoms. Based on these and other findings, we arrived at our initial therapeutic hypothesis. By giving an NMDA PAM acting similarly to naturally occurring 24S, we might be able to correct aberrant NMDA activity seen in early HD and perhaps also improve cognition. Building on this principle, we recruited a sample of patients with early HD and ran them through one of our signature open label studies. These were patients with objective cognitive impairment and mild functional impairment. We treated these patients with 1 milligram of open-label SAGE-718 daily for 14 days and measured their cognitive performance every other day. While we gave them difficult tasks to complete, such as the 2-back task, a measure of executive performance shown here, we saw improvement that kicked in robustly on day 8 and was maintained through day 14 of treatment. And as the HD patients improved, they approached the range of performance that we saw in healthy volunteers on the same task, but collected in a separate part of the study. While an understanding of 24S deficits led us to Huntington's, it has given us confidence to move forward with further development in HD as our lead indication for SAGE-718. Recent findings from the PARADIGM study in patients with Parkinson's disease mild cognitive impairment, confirm that 24S deficits are not required to elicit a clinical benefit with SAGE-718. In fact, in this different population of individuals with cognitive impairment, we saw marked improvement in performance measures over 14 days of treatment with open-label SAGE-718, just as we saw in the HD study. We saw this improvement across the board on 5 out of 5 tests of executive functioning. We also saw improvement on 3 out of 4 tests of learning and memory, which like executive functioning is impaired in Parkinson's disease. This last finding is particularly interesting as we await the readout from the LUMINARY study in Alzheimer's patients expected later this year. Circling back to the spatial working memory test, which we reviewed before in the context of HD, here, we see the effects of open-label SAGE-718 on Parkinson's MCI patients from the PARADIGM study. Again, as difficulty on this task increases, the patient is required to draw on higher-order cognitive abilities such as executive functioning, to complete the task with a minimal number of errors. And in PARADIGM, we saw that treatment with SAGE-718 was associated with statistically significant improvement compared to baseline on the same executive task. This is just one example among findings from 5 different tests of executive functioning, where we saw improvement associated with open-label SAGE-718. These results are very encouraging and certainly warrant further investigation. SAGE-718 has been generally well tolerated in the studies completed to date, including 3 Phase I clinical pharmacology studies, a Phase I study in patients with HD, 3 healthy volunteer experimental medicine studies and Part A of the Phase II PARADIGM study in patients with Parkinson's MCI. Within the safety data available, the rates of adverse events reported have been low with the most frequently reported AE being headache. No serious adverse event has been reported to date. We will continue to monitor safety and tolerability of SAGE-718 as ongoing and future studies are completed. Now I'll hand the discussion back to Mike for some final thoughts.

Thanks, Aaron. We are excited and encouraged by the preclinical and clinical data generated to date with SAGE-718. If we take a step back and look at the broad clinical program for SAGE-718, we are using a model previously established with Sage's GABA A receptor modulator platform with a series of small translational medicine studies in open-label trials in order to allow human data to inform and drive our decision-making. Ultimately, we believe that SAGE-718 and the broader NMDA portfolio have the potential to significantly improve cognitive impairment across all ages and we believe that if we are successful in our goals, we will have the opportunity to improve the lives of millions of people. The first step in this journey is to define cognitive impairment in Huntington's disease as the lead indication for SAGE-718. As you heard today, through our engagement with various stakeholders, including patients, caregivers, regulators and advocacy, we know that cognitive impairment is a high unmet medical need for HD patients and their families. Furthermore, we have gained a fuller understanding of the data we expect will be required to address the needs of these key stakeholders to support a potential product and to enable patient access. Earlier this month, we announced our intention to initiate a well-powered, placebo-controlled Phase II study in HD patients by the end of the year. We have also initiated a non-interventional study to better link cognitive performance to patient-reported functioning in HD. We have discussed the potential regulatory pathway for SAGE-718 in HD with regulatory authorities, and plan to continue these discussions since we are pioneering a new indication for an orphan disease. We do believe, based on KOL, advocacy and regulatory discussions that these studies, if successful, have the potential to serve as core components of our ultimate goal, which is a registration package for our first SAGE-718 indication. In addition to moving forward with our Huntington's disease trials, it is important to note that we continue to evaluate SAGE-718 in multiple patient populations including an expected data readout from the LUMINARY trial in Alzheimer's disease. These readouts will inform our plans for subsequent placebo-controlled trials and help us refine the broader development trajectory for SAGE-718 and other NMDA modulating molecules. Thank you. And I will now turn it back to Jeff to handle Q&A with the operator.

So thanks, everyone. I hope that the presentation was informative. I think what we will do now is that we're going to turn it over to Q&A. I would ask and remind you again, please limit your questions to those related to the presentation with either NMDA or SAGE-718. And so with that, we'll open up the line for Q&A. Operator?

[Operator Instructions] Our first question comes from Ritu Baral with Cowen.

I wanted to ask about the degree of NMDA modulation and the mechanism. I guess what degree are you targeting for Huntington's and is this different as you look at Parkinson's and Alzheimer's? And also, I don't think you've noted the allosteric site in question that you are targeting. Is it related to -- is it GLIC 13? Is it related to that or are there multiple sites?

Thanks, Ritu, and good morning, and good morning, everybody, and thanks for joining us today to discuss Sage's NMDA modulator platform and SAGE-718, specifically. To your questions, Ritu, what you're really asking about the mechanism of action for 718 and we think this is a really critical topic. The type of modulation, the site of modulation, these are all questions that we've spent an awful lot of time thinking about. And I think what I'll do is turn over to Mike to talk to you in a little bit more detail about how the team is thinking about interaction of 718 with the target receptor, and how we think about the degree of modulation for different disease states. Mike?

Thanks, Jim. And I'll let Aaron comment in a minute about sort of thinking through the Huntington's versus Parkinson's. But in terms of the specific mechanism of action, we really have been building off of our understanding of the endogenous system, which is the 24S-hydroxycholesterol and how knowledge of how that endogenous molecule interacts with the receptor to really inform our design decisions around SAGE-718. And so we believe this is a very unique site. It's a very unique approach versus other ways of modulating the NMDA receptor that are in the field. We think it really builds into a lot of our understanding of the appropriate degree of modulation in terms of being able to dial-in a level that addresses the question of, are we modulating the receptor to the point to provide functional improvement across a range of indications? And we also think it's not necessarily limited to those indications where you might see a disruption of 24S. We think this has a broad applicability for diseases wherever NMDA dysregulation occurs. And I think that's really the importance of understanding both the Huntington's data that we generated to date and the Parkinson's data. And I think, Aaron, maybe you can address sort of the similarities we see across those different sites and how that really speaks to how we think we've dialed-in the level of modulation that's appropriate.

Yes. Thanks, Mike. There are commonalities across these neurodegenerative disorders, and we've taken a very deliberate approach in how we're approaching the indications. We saw a translational story that seemed to link 24S levels with executive deficits. We know that executive deficits are prominent in Huntington's. And that's really what we were going after when we did our initial signal finding. We then proceeded with Parkinson's disease, where we know there are executive deficits, but we also wanted to learn about memory and learning. And then coming up later this year, we'll be looking more closely at Alzheimer's disease, where we're really seeing that memory and learning. Ultimately, the types of deficits we need to enrich for in these patient populations, but the question is the same at the end of the day, how do we get patients feeling better? How do we get them functioning better? How do we translate an intervention into something that will have meaningful effects on their lives? So it's a great question. Thanks for asking.

And I guess the last point to make, Ritu, the second part of your question around site of action. It's important to know that because this -- we're modeling based -- our molecules, including 718, based on this endogenous 24S-hydroxycholesterol, we think that the binding site on the NMDA receptor for 24S and therefore, for 718 is distinct. So it's only used by [ neurosteroid ].

Super. I've got one very quick follow-up on the adverse event profile. Any hallucinogenic or dissociative signals whatsoever across the trial?

So again, I think Aaron gave you the summary. We're seeing so far, no serious adverse events across all the trials. So Aaron, anything further to add?

No. I think the first question was a hallucinogenic. Is that what the first question was? But the answer is no. We have not seen either of those things.

[Operator Instructions] Your next question comes from Akash Tewari from Wolfe Research.

This is Lie for Akash. So we noticed it's quite interesting that the 2-back test in the Phase I Huntington's disease patients show like very continued improvement over time, but if we look at the Spatial Working Memory test that's in the Phase IIa Parkinson's disease patient, it showed a little bit plateau after just around like 7 days. Could you just provide more color on these different responses within different patients? Is this due to like the difference in the test? Or is this more like the nature of the disease?

Right. Thanks for the question. Yes. And I think the key point is that the strength of a battery is to be able to put together multiple tests that can kind of prove, in this case, executive function or learning and memory in multiple different ways. As you've heard from both Mike and Aaron, complex constructs, if you will. And so it's -- it does require multiple ways to measure the effects of either a disease like Huntington's disease on those complex processes or the effect of the drug on immediately modulating those effects. So I think we're still in early enough days that I wouldn't want to say too much about what the specific effects of 718 are on one test or another, especially over different time points, but I think the very clear message is that we're seeing a significant improvement in executive function as a consequence of the battery of tests. Aaron, anything you want to add to that?

I think it's really -- Mike -- I'm sorry, Jimmy, you sort of hit it on the head. And really, it's really the sum of all parts, right? We are seeing across the board, both on the tests that we've shown today, the 2-back that we've shown previously, really a movement in the right consistent direction. And I think ultimately, translating that into something that as meaningful to patients will be the end goal. So I think these are the right questions to be asking, and these are the ones that we are asking internally as well.

Your next question comes from Salveen Richter with Goldman Sachs.

This is Andrea on for Salveen. Maybe just on the NMDA portfolio generally. If you wouldn't mind reminding us the profile of 718 versus your second-generation assets and how that strategy -- how you're thinking about the strategy as you think about which asset to bring forward across various indications?

Yes, of course, Andrea. So again, let me start, and then I'll pass it over to Mike to give a little bit more detail. I would say one way to think about it is similar to what we've done with our GABA modulator platform, we take the approach of following the clients starting from asking the question of who could benefit, what patients could benefit from this approach. And then as Sage's library of chemical molecules expands, we're able to move forward molecules that have complementary profiles to each other. And so it really is the business of asking both of those questions in parallel, what patients are going to benefit most from which profile and which molecules are looking like they're the best fit for those patient populations. But Mike, perhaps you'd like to talk in a bit more detail about one molecule versus the other in the platform?

Yes. Thanks, Jim. Yes. So we've taken a fairly sort of deliberate and also sort of a proactive and predictive approach when we've been thinking about building the NMDA portfolio. So SAGE-718 is the lead molecule. There were some very specific design considerations that we had in place in terms of the potency, the degree of modulation that we wanted into the receptor and where we thought maybe some of the initial positioning would be in terms of patient indications. As we move SAGE-718 forward, and we learned about the molecule as we conducted our translational science studies, the experimental medicine studies, where we looked at target engagement and biomarker, we realize that there's an opportunity to have a portfolio of molecules that have different pharmacological properties in terms of how they modulate the receptor, how we might want to position them in terms of different indications. As Jim was saying, if you think about cognition and how it impacts the whole trajectory from neuro development conditions, to neurodegenerative conditions to neuro rehabilitation, there may be different pharmacological properties you want, different PK/PD properties that you might want to have in there. And this is really, I think, the strength of our translational approach of where we can move a compound like SAGE-718 into the clinic, learn a lot about it, mechanism of action, a lot about how it engages the target and then say, okay, where are some of the opportunities? And we've built some of that learning into 904 and also into 421, which is another NMDA molecule that we have in our portfolio, again. And so we really see there as an advantage of having different fit-for-purpose molecules to really be able to target specific aspects of where cognition may be impacting lives and independence and function.

The next question comes from Gary Nachman with BMO Capital Markets.

I'm curious, what are the challenges diagnosing patients with early HD? How many of those patients actually present to get treated early on? And then mechanistically, would 718 be able to work in later-stage HD? Or do you have to get it early when the 24S levels just start to go down?

Thanks. Aaron, do you want to address this question?

These are -- absolutely. These are great questions. The very unique thing about Huntington's, right, is that it's a genetic disorder. It's autosomal-dominant. You can get tested, you can even -- you'll find out how many trinucleotide repeats you have. So really, what is your likelihood, personally, of manifesting the disease and when. You'll find that in this new era of people being comfortable with genetic testing, people are getting tested more and more, people know that they're at risk, often from seeing family members, as Seth shared, succumbing to the disease. And so while we know -- are able to predict and also seeing a lot of pre-manifest patients identifying, there's obviously more work to do in getting the word out and emphasizing the importance of testing. I think the question around staging is really important. The approach that we've taken is that we want to intervene in a period of the disease where there are still -- the architecture of the brain is still intact such that it can benefit from a drug like 718. That's not to say that a drug like 718 wouldn't work later in the disease, but we really are focused on maximizing the effects. And so those effects are not just improving performance on a cognitive test, but also, as we've been saying all morning, really imparting some functional improvement. A very practical example: if a patient is in a mid-stage of Huntington's disease, they've started to give up some of their activities of daily living, their independence, it's very hard, from a very practical perspective, to regain those things. If you can imagine someone who has lost the ability to drive either based on their own assessment or family's assessment, then getting them back in the driver seat after a period of not driving, that's a really difficult challenge. The approach we take and which is one that we've heard from the community, from patients, is that preserving, holding on to those abilities early on really may be the appropriate strategy to overall maximizing quality of life. So this is a very patient-driven approach that we've taken. And I think that if it plays out, it will have some meaningful effects.

If I could just add to that a bit, Aaron, too, because I think it's an important strategy, not just for how we're thinking about Huntington's, but also about any of the other neurodegenerative conditions that we may be looking at, whether it be Parkinson's or if the LUMINARY data comes out as well, really targeting the earlier phase of the disease where we think we may have the most beneficial impact on functioning and at an age that is still sort of the prime years of life, where the mechanism could really tap into those, as you said, those core cognitive abilities that are responsible for independents across a number of neurodegenerative conditions, not just Huntington's as well.

Yes. It's a great point, Mike. I mean there's a trend in the field of neurodegeneration that we're moving earlier in the scope of these diseases because that's where we think we're really going to impart the greatest patient benefit. And so it is a strategy we're taking across the board. And again, we're taking cues from the community, from patients to have the most benefit possible.

This is part of what's really interesting for us about going with an entirely new mechanism of action, as you're hearing from both Aaron and Mike. Our focus and our strategy is to start in the time course of the disease in the areas when we think that we can have the greatest impact for patients. And then as we go along, we're going to learn, and we'll learn just how wide that window of potential intervene will be.

Our next question comes from Cory Kasimov from JPMorgan.

Is Dr. Frank still on the call to take questions or no?

No. Dr. Frank is no longer on the call.

Okay. Okay. I'll skip that question then. I guess the other question I wanted to ask about was just thinking about kind of the most important clinical endpoints when it comes to Huntington's and as you think kind of longer-term and think about future potential regulatory path. So how much do you expect quality of life endpoints could factor down the road here as you think towards registration? And what do you need to do to get regulatory sign-off for your -- for the SWM test?

Thanks, Cory. Yes. As Aaron was just saying a few minutes ago, I mean, I personally found Seth Rotberg's comments about the urgency for the need for new treatments to be particularly powerful. I mean there's no question there's a tremendous amount of unmet medical need in HD and really in all of the neurodegenerative conditions we're talking about. That sort of -- that statement of it could be me someday, I found particularly motivating. And so it really leads to how we think about this. And certainly, we're always going to engage with regulators at the appropriate times, and we're also always looking for regulatory mechanisms that could contribute to the goal of getting therapies to patients who need them as quickly as possible. So we'll have a look at all of that, but I think at this stage of the development of the program, what we're really focusing on is understanding patient needs. And we think that understanding those needs is going to lead directly to good conversations with regulators. So Aaron, maybe I'll ask you to talk a little bit about what we've learned in discussions with experts and with the advocacy groups and with patients so far around those unmet needs.

Absolutely. And it was actually said very well by both Dr. Frank and by Seth. I mean you can't separate the cognitive piece from the decline that you see in Huntington's and really, it is the cognitive piece that is driving so much of the decline. Even when you're looking at motor tasks, the ability to manage those motor tasks become really important, particularly when you think about executive deficits. I think the question about how we measure that is an important one. And you heard Dr. Frank say, the measurements that we have for functioning today are very gross, they are not perfect. There are scales out there that have historically been designed for the motor deficits you see in the disease. And those are ones that we are looking at and integrating into our plan. But there are also other ways to think about measuring the trajectory of disease. Mike outlined our multi-trial approach to pursuing Huntington's. One of those is looking at new measures that have been gleaned from our interactions with patients to really draw on those executive and cognitive deficits early in the disease. So it's a full-on approach where we're taking what historically has been used, what we think is innovative, bringing that all together as part of the story we want to tell about SAGE-718. Mike, maybe I'll hand it over to you if you want to provide some color on sort of the overall development path.

Yes. Thanks, Aaron. And I think you hit on the key notes, right? There is an element of the Phase II trial that we're talking about initiating by the end of the year and how we will look at different endpoints related to specific areas of cognition and other endpoints that we think are relevant, but it is a broader program where we're going to be using, for example, this non-interventional trial to understand this linkage between what these specific tests of cognition mean to the patient, how does it map on to their needs as well and really fully capture the patient experience, and how that is an important component of any type of interaction we would have with regulators or other key stakeholders within the community. The other aspect is just technology. Look, we are pioneering a new approach. This is an orphan disease. There's a lot of opportunity as we gather this data to engage with regulators, engage with other authorities to really move the conversation forward. And the one thing I would say is in all the conversations we've had with all stakeholders, everyone recognizes that cognition clearly is an unmet medical need for this patient group. And there is a palpable sense of really wanting to work as a community with us together to move forward medicines that really matter to the patient in these prime years of life.

Our next question is from Douglas Tsao with H.C. Wainwright.

Just really quick, just curious in terms of the sort of your expectation in terms of the benefits over time. Do you think that they will sort of pick up? And -- or is there any kind of risk of sort of like a tachyphylaxis reaction, so modulation of the NMDA receptor?

Yes. Thanks. So we see no evidence so far of any kind of tachyphylaxis to NMDA receptor modulation. And that is including all of our preclinical work as well as the data to date in our clinical studies of the HD population, the PD population and the experimental medicine studies that Mike described earlier. Of course, we're at a stage in our clinical program, where those are of still relatively short duration. So we're out to 14 days. The preclinical study is, of course, much longer. And that's something that we'll be monitoring as we're moving forward. So we are starting a Part V to the PARADIGM study, where we'll extend dosing out to 4 weeks, in part to address the question that you're asking. Mike, anything to add from a mechanistic perspective about NMDA receptor modulation?

I think -- yes, Jim. I mean one of the things is this comes back to the overall approach that we have. I do believe when you've thought about modulating receptors like the NMDA receptors in the past where you looked at -- when the field has looked at approaches such as agonists of this receptor, when you really strongly drive these receptors, you do run these types of concerns and whether you could see tachyphylaxis. We believe that our approach is very well-designed to minimize those types of effects, right? This is not a sort of a stimulator where we're really driving the receptor hard. And it's often in those conditions where you overstimulate the receptor, where you move past its natural dynamic range in which it operates, that's when you kind of kick in these mechanisms that contribute to effects like tachyphylaxis. So in the context of how we're approaching the modulation of the receptor by working within the sort of the constraints and the sort of the guardrails of how the natural system behaves, we think, from a mechanistic perspective, we've created a set of molecules that should be devoid of strong tachyphylaxis. But as Jim said, this is why we run the clinical studies. This is why we do this in a deliberate approach. This is why we're looking at extending the duration studies to really make sure that these hypothesis that are grounded in the science continue to manifest themselves in the clinic as well.

Our next question comes from Vamil Divan with Mizuho.

So maybe just a couple, going back to the PARADIGM and what you disclosed early in the month and talked about now, too. Just putting that in context a little bit, I mean it's obviously a pretty small short study. There's no placebo arm. Can you just sort of talk about the clinical meaningfulness of what you're seeing there? And I guess, this degree of improvement that you're seeing on the spatial working memory. What does that mean, I guess, in terms of actual clinical impact on a patient's ability to function independently like the driving or eating, those discussed earlier? If you could just frame it a little bit more on the clinical relevance would be helpful.

Yes. Thanks for the question. Maybe some general thoughts from me, and then I'll turn it over to Aaron for some more specifics about the elements in the PARADIGM study. I think the place to start is we're very excited about the results from the PARADIGM study. It really adds to a growing body of evidence around the ability of this receptor modulator. And more importantly, that, as Mike was just talking about, this type of modulation to have a really true meaningful effect for patients. And it's part of our strategy explicitly to start with small, often open label studies. And we think we get a lot of benefit out of that. One is we get some quick answers on things like, do we have the right approach, do we have the right doses, and where are the areas where we're seeing effects. Importantly, the other benefit we get is we learn an awful lot about the patients and about the trial design. And those are learnings that we apply as we go further along into the program into larger and more diverse studies. But Aaron, maybe you could talk a little bit about some of the things that we're seeing in the trial and why we're so excited about those results.

Yes. It's a great point. And I think that while we're in both early stages of our work in Parkinson's, but also in to sort of sharing what we've learned to date, the types of signals, for example, in the spatial working memory are quite remarkable because what they're showing is that it's not that people are just getting better, faster on a test, they're actually getting smarter on how they do the test. When a test is simple, people kind of max out, but it's really over time with treatment that they're developing strategies, they're drawing on these higher-order cognitive processes, things that are not driven by motor performance or attention. We think that has a direct line of sight to improvement in things like ability to drive, ability to manage your daily functions. And the other tests, which we haven't spoken about today, the other tests of executive functioning, all move in that same direction, right? They're all showing that there's more integrated processing going on. There is more ability to strategize the plan. And this is why we think ultimately, it will translate, we hope, into the right type of clinical benefit provisions.

Our next question comes from Tazeen Ahmad with Bank of America.

Maybe just one for Huntington. As you think about the design of studies for more advanced level, how can you get a sense of whether the mechanism that you're studying with 718 would be successful in improving cognitive function versus slowing down cognitive function loss? And in terms of market opportunity, would you need to see actual improvement in cognitive function for this to be a meaningful product in your mind or just given the level of undermet need, would simply slowing down cognitive function loss be sufficient?

Yes, thanks for the question. I think the short answer is the data so far suggest that we could see either. I think certainly, what we're looking for is a slowing of the rate of decline for patients. And we think that would be an attractive profile for a therapeutic, but the data to date suggests that at least for these early manifest Huntington's patients, we're actually seeing a significant improvement in function. So it really could be either. I think when you think about some of the things that Seth Rotberg was talking about earlier, just being able to maintain function at certain stages of the diseases would probably be very attractive to patients and to caregivers. But we do think that at least at these early days, the data support the idea that we can actually improve their performance over a time period.

Our next question comes from Laura Chico with Wedbush Securities.

I kind of want to follow up on the longer-term effects. I might ask this a little bit differently. The majority of these studies have all looked at -- I'm sorry, the majority of the 718 studies conducted to date have all looked at shorter-term assessments on cognitive function, but Dr. Frank mentioned, patients are living with the disease typically about 20 years. So just in that kind of context, how are you thinking about longer-term functional assessments and how you might evaluate 718 on a longer time scale? So just from the regulatory perspective, what do you think is going to be necessary to demonstrate? And perhaps how would short-term improvements be considered by the agency versus longer-term impacts?

Yes. Thanks, Laura. Yes. So let me start, and then I'm going to hand over to Mike to talk about the strategy behind the structure of the program moving forward, but I think we certainly don't think that 14 days is going to be sufficient on its own nor do we think that we've necessarily shown the full possible capabilities of SAGE-718 with 14 days of dosing. So we absolutely plan to dose for longer as we're moving forward. And there's 2 ways you'll see that in the shorter term: one is we're adding an additional 2 weeks of dosing into a Part B for the PARADIGM study, so we'll get some ideas about the effects after 4 weeks from that study; but then, as I think Mike said earlier, the Phase II study that we're planning in HD is actually intending to dose for 3 months. And so as we go along, we'll continue to extend the duration of dosing. Mike, do you want to talk a little bit about how the program is thinking about our strategy when it comes to longer-term dosing?

Thanks, Jim, yes. Yes. So we do believe that the symptoms really matter in this case. And I think the way we're approaching this is that improving the cognitive symptoms in these prime years of life is the critical need that SAGE-718, in the near term, can provide to patients. So in thinking about structuring the program, that's a good reference point, and that's a reference point that we've really taken into consideration. So as Jim says, we believe to go beyond 2 weeks is important for demonstrating the range of a symptomatic benefit that we may see in the patient population. And we are looking at this Phase II trial being a 3-month and duration trial. That being said, we don't believe we need to demonstrate that this is a sort of a framework of disease modification, right? We think that robust improvement seen over that intended 3-month period is really going to speak to the ultimate power of how this can be used in the context of the early phase of HD patients. And I mean, Aaron, I know, you've been involved a lot in some of these study design considerations, so maybe add a bit of color to that.

Yes. I think that's right on. In terms of 3 months, it's not by accident that we arrived at that timeframe, but the other point I'll say is that in this -- in the world of Huntington's disease, these patients are being fairly well-characterized off of treatment. So there is data that is being generated every day by collaborators, academics, about what the disease looks like over the course of a year, over 2 years, and we are designing our studies to include those types of measures so that we can benchmark across -- against the natural rate of decline. So while everything so far points to the fact that you may see some improvement in cognition, we'll also know what would happen to patients who are off drug and how we are measuring up. So I think it's really an integrative approach. And that's why we've been engaging the community academics from day 1 to understand really what Huntington's is about and what a meaningful change would look like.

Thank you, and that concludes our Q&A session. I would now like to turn the call back over to Jim Doherty for any further remarks.

Thanks, operator, and thanks to everybody for joining us this morning. I especially want to thank Dr. Frank and Mr. Rotberg for joining us today. I hope everyone can see that we're very excited about the progress we're making across our entire NMDA platform. We look forward to providing additional updates throughout the year, beginning with the data readout from our LUMINARY trial in Alzheimer's disease, followed by the activation of a 4-week dosing arm in the PARADIGM study, and finally, the initiation of a Phase II study in Huntington's, which if positive, will bring us one step closer to pursuing the initial indication for SAGE-718. So thanks again, and have a great day, everybody.